Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

PRIVATE BUSINESS

KILLINGHOLME GENERATING STATIONS (ANCILLARY POWERS) BILL [Lords] (By Order)

Order for Third Reading read.

To be read the Third time on Thursday 16 May.

EAST COAST MAIN DIVE (SAFETY) BILL (By Order)

Order for Second Reading read.

To be read a Second time on Monday 13 May at Seven o'clock.

Mr. Speaker: As the next six Bills have blocking motions, I shall put them together.

CATTEWATER RECLAMATION BILL (By Order)

LONDON REGIONAL TRANSPORT (PENALTY FARES) BILL (By Order)

LONDON UNDERGROUND (KING'S CROSS) BILL (By Order)

REDBRIDGE LONDON BOROUGH COUNCIL BILL (By Order)

BRITISH RAILWAYS (No. 3) BILL [Lords] (By Order)

LONDON UNDERGROUND (SAFETY MEASURES) BILL [Lords] (By Order)

Orders for Second Reading read.

To be read a Second time on Thursday 16 May.

Oral Answers to Questions — AGRICULTURE, FISHERIES AND FOOD

Conservation Bodies

Mr. David Nicholson: To ask the Minister of Agriculture, Fisheries and Food how many times during the past 12 months he has met representatives of conservation bodies.

The Minister of Agriculture, Fisheries and Food (Mr. John Selwyn Gummer): I have met representatives of conservation bodies formally on four occasions. My colleagues have also had a number of such meetings.

Mr. Nicholson: My right hon. Friend will know that my interest in the subject derives from the fact that my constituency ranges from the smallest English national park to the Somerset levels. Will he ensure that that land, which is not suitable for intensive and, therefore, fairly profitable farming or for conservation assistance, does not drift into a gentle decline? Will he therefore, as a matter of some urgency, bring forward proposals to ensure that all the countryside is farmed in an environmentally sensitive way?

Mr. Gummer: As my hon. Friend knows, I have had many individual and informal meetings with conservation bodies and I am pleased to find that they increasingly recognise that if the British countryside is to be conserved, it can be only through the activities of farmers. That is why we are insistent that the reform of the common agricultural policy should be driven by a demand for environmental support. The Government are working for that fundamental change, which we hope to achieve.

Mr. Geraint Howells: I hope that, when the Minister meets conservationists in Monmouth next week, he will remind them that Welsh farmers' incomes have dropped by 50 per cent. over the past two years and that 14 per cent. of Welsh farmers are contemplating giving up farming due to the policies of the Secretary of State for Wales, who has full responsibility for agriculture in Wales. The Minister may not be aware that his colleague said yesterday at the annual general meeting of the Farmers Union of Wales in Aberystwyth that there is worse to come. Is that policy due to the advice given by Ministers in London and by the Government?

Mr. Gummer: The hon. Gentleman's question would go down better were it not known that his party was wholly in favour of the European Community and supported the common agricultural policy. He knows perfectly well that the events about which he is talking are a result of the CAP, which we are committed to changing and which we are fighting to alter. The hon. Gentleman has no possible answers to that. He should not do this and he does so only because it is this week.

Mr. Onslow: Will my right hon. Friend take this opportunity to emphasise the importance of conserving water resources in the countryside? Will he redouble his efforts to encourage farmers to impound the water from


excessive rainfall in the winter rather than running down river levels by extraction for spray irrigation in the summer?

Mr. Gummer: I agree with my right hon. Friend that the problems of water levels, especially in the east of England, are of great seriousness. Happily, even the hon. Member for Ceredigion and Pembroke, North (Mr. Howells) cannot blame the Government for that. The truth is that we shall have to share out the use of water. I was very unhappy about some of the suggestions that the National Rivers Authority put forward originally. I am pleased to say that they have now been considerably revised in a way that will protect the water table and, at the same time, enable farmers to use water as they need it to produce crops. I assure my right hon. Friend that we are looking carefully at the water levels of rivers in which I know that he has a particular interest, which he has pressed regularly to me.

Mr. Dalyell: Why cannot the Minister tell Mr. Ian Richardson and other conservationists in his constituency who is behind the Swiss bond holders who own Heveningham hall, one of the 20 most beautiful houses in England? Does he understand that, as I represent Hopetown and Dalmeny, it would be quite remiss of me as a Member not to know who owns those great houses?

Mr. Gummer: The hon. Gentleman referred to a matter which is entirely under the control of my right hon. Friend the Secretary of State for the Environment. I hope that the hon. Gentleman will be more careful with his comments and I also hope that he will recognise the enormous amount of work that has been carried out to save that particular house——

Mr. Dalyell: It is 20th century restoration of an 18th century house.

Mr. Gummer: —and take that in the context of a long period of misuse of the house by the former owners. Who that former owner was—he is now dead—is no more clear to me than it is to the hon. Gentleman. The hon. Gentleman knows perfectly well that that is a matter for my right hon. Friend the Secretary of State for the Environment and it would be quite improper for me to answer in any other way except to say that I do not know who the owner is.

Mr. Dalyell: On a point of order, Mr. Speaker. I hope to raise the matter in an Adjournment debate.

Mr. Speaker: Order. It is not legitimate to raise that matter on a supplementary question.

Fishing Vessels

Mr. Harris: To ask the Minister of Agriculture, Fisheries and Food how many fishing vessels have taken the gear option as opposed to the tied option.

The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. David Curry): One hundred and eighty-five vessels have taken the gear option while 258 have elected to tie up.

Mr. Harris: Although I accept that the gear option is not always practical for many boats in Scotland, does my hon. Friend agree that the number that have taken the alternative route and are tying up is gratifying? Will he

accept the congratulations of the House on having fought so hard to ensure that that option was made available in the first place?

Mr. Curry: My hon. Friend will know that when we entered the Council we faced proposals that included the 120 mm mesh size, a 10-day tie-up and no gear option. We had to fight very hard to get the tie-up limited to eight days and to get the gear option. I am pleased that that has been taken up by about one third of the Scottish fleet. We knew that it would not be appropriate for a large number of vessels and we did not pretend that that was other than the case. However, I hope that it is proving effective for those vessels that can take advantage of it. Tie-up is certainly the preferable option where it will work.

Mr. Salmond: Does the Minister accept that the boats have not elected to tie up but have been forced to tie up? Will he confirm that more Scottish boats are now affected by the regulation than boats in the rest of the European Community put together? Has the Secretary of State for Scotland spoken to the hon. Gentleman about his conduct during the tie-up debate and is the hon. Gentleman now able to apologise to Scotland's fishing communities or, better still, to signal a change of policy?

Mr. Curry: The hon. Gentleman says that more Scottish boats are affected than other boats. That is true. The stocks affected are those that are fished predominantly by Scottish fishermen. The rules stated that the boats affected were those with 40 per cent. of cod and haddock in their total catch in areas IV and VI which are fished predominantly by Scottish boats, and those with more than 100 tonnes. The action is imposed by the Community. It is not something which we have dreamt up. In fact, we mitigated that measure. We are acting to conserve stocks for the Scottish fishing industry. That was our sole reason for acting. Had we not done that in respect of stocks of haddock, of which we have 80-odd per cent. of the catch, and stocks of cod, of which we have 50-odd per cent. of the catch, we would have been remiss in our duties.
In the debate, I explained to the hon. Gentleman and to the fishing industry the facts behind the decision and the importance of making it stick. I have no apologies to make about the thoughts that I expressed during that debate, because I was simply expressing the truth. The fishing industry preferred to have the truth presented bluntly than to have it wrapped up in silken phrases that mean nothing.

Mr. David Porter: The tie-up rule clearly means "Thou shalt not fish." Is my hon. Friend aware that in some cases it means "Thou shalt not earn a living"? The fishermen on some boats that are affected claim that they cannot get other work, such as standby and diving support work. Will my hon. Friend undertake to look into that matter?

Mr. Curry: In so far as I can assist, I shall certainly do so. The regulation was imposed upon us by the Community because of concern about stocks. We agreed that the stocks were in a serious condition. We did not say, "There is no problem" or "Let us pretend that the problem does not exist." We sought to obtain the most sensible application of a rule that we had to observe. Having obtained it, we are obliged to enforce that rule, or we will end up next year with an even more inflexible rule from Brussels. It would be in no one's interests if that happened.
I shall look at the cases that my hon. Friend can bring before me, but I cannot alter the rules that we are obliged to follow.

Fish Conservation

Mr. Austin Mitchell: To ask the Minister of Agriculture, Fisheries and Food what proposals he has for improving conservation of fish stocks.

Mr. Irvine: To ask the Minister of Agriculture, Fisheries and Food what proposals he intends to make to the July Council of Fisheries Ministers on the conservation of fish stocks.

Mr. Curry: We have already announced unilateral conservation action to apply from July. My immediate priority now is to achieve greater selectivity of gear on a Community-wide basis.

Mr. Mitchell: As we have a conservation crisis in the North sea in particular, a proper system of conservation would require a ban on industrial fishing, a ban on bream trawling and a ban on fishing in spawning grounds during the spawning season. It would also require a ban o n square mesh panels, a one-net rule and a series of such measures. Why is not the Minister developing a proper British conservation programme instead of sitting there like a Saudi kleptomaniac with a hands-off policy, waiting for the Commission to do it all by such daft measures as the eight-day lay-up?

Mr. Curry: The hon. Gentleman knows the facts. He cannot complain simultaneously that we are not introducing our own measures and that we are about to impose measures on the United Kingdom fleet because of the importance of the stocks that we must conserve. It is a difficult choice. We have not been afraid to take that choice. Many of the matters that the hon. Gentleman mentioned are in the United Kingdom proposals—for example, the single-net rule, which is applicable. Other measures can be proposed only by the Community. Where we have national scope, it must be within the framework of the Community rules. That is why we had to apply, for example, a 90 mm square mesh panel in a 90 mm net. We did not have the flexibility to go beyond that proposal. We have not hesitated to take those actions. Where we have taken those actions, they have hardly been greeted with overwhelming acclaim by the fishing industry.

Mr. Irvine: Does my hon. Friend agree that one of the main problems with the conservation of fish stocks is that, while the British Government play by the rules and take effective enforcement measures against our own fishermen, too many other European Governments do not properly apply the rules against their own fishermen? Will my hon. Friend take care at the Council meeting in July to make that point forcefully to his European counterparts?

Mr. Curry: Because of our desire to have effective conservation, we defended at the previous Council meeting, and will do so at future Council meetings, the basic idea that the common fisheries policy should be enforced by the member states in the waters that they control. We can impose that system on all vessels fishing in those waters. If that policy disintegrated and enforcement

were handed over to some centralised control, or if we were to slacken our enforcement, I fear that we would then have differentials.
Certain member states enforce rules strongly. The Dutch, for example, impose a tie-up on their own fishermen and are suggesting that the tie-up should become the principal instrument of Community conservation. We would have great difficulty with that, but we will certainly do our best to make sure that we get a proper level of enforcement. That is one respect in which the United Kingdom is acknowledged to be ahead of the field.

Mr. Wallace: I am sure that the hon. Gentleman will agree that the Minister of Agriculture, Fisheries and Food said last week on a visit to Scotland that fishermen had to take an initiative in conservation. Will he confirm that the Scottish Fishermen's Federation put to the Government a comprehensive conservation package almost two years ago, that the industry has also proposed a decommissioning scheme and that some sections of the industry have actually advocated that the industry make a contribution to a decommissioning scheme? Will the hon. Gentleman take this opportunity to clarify the confusion at the recent meeting between Scottish fishery leaders and Ministers on the Government's position on decommissioning and say whether the door is still open to some form of decommissioning scheme, possibly involving an industry contribution?

Mr. Curry: My right hon. Friend has made it absolutely clear that he is ready to examine any workable proposal for the industry that is based on an industry-funded scheme and would deliver long-term conservation gains. That is a perfectly clear statement. The hon. Gentleman said that the industry brought forward its proposals two years ago, which is true. Those proposals were based on 90 mm mesh with an 80 mm panel.
We tried to get those policies accepted in Brussels. but they were not acceptable. The Scottish Fishermen's Federation has now understood that. I understand that it recently introduced proposals, accepting that it should go further on the size of the square mesh panel, but that there are also other conditions. The industry is moving and recognises that it must move forward, and we welcome that fact. As I said, we are willing to look at a package of measures that will assist the industry, provided we get effective gains which would be in the interests of the fishermen. It is their futures that are at risk.

Sir Michael Shaw: Is my hon. Friend aware that fishermen in my constituency fully realise the need for conservation, but that, at the same time, they demand fairness in the enforcement of the restrictions on gear and quotas throughout the United Kingdom?

Mr. Curry: I appreciate the thrust of my hon. Friend's comments. Although our fishermen fish for different stocks in different vessels, we must ensure that they all play by the same rules. We can hardly complain about other people failing in this regard if we do not maintain effective enforcement around our own coasts. I am sure that my hon. Friend is aware that the enforcement authority in Scotland has now become an agency. I am extremely confident that that agency will make a great contribution to enforcement practices north of the border. We shall ensure that that is the case south of the border also.

Dr. Godman: The Minister said a moment ago that the eight-day tie-up was imposed upon him by the Fisheries Ministers Council. I must question the accuracy of that statement because Mr. Marin, the European Commissioner for Fisheries, said that that proposal came originally from the Minister's Department. Is not the truth of the matter the fact that the fleet is too big and has to be reduced and that the most humane and fair-minded way of doing that is by a decommissioning scheme?

Mr. Curry: No, it is not true that that scheme originated in my Department. It originated with the International Council for the Exploration of the Seas, which stated that there must be a 30 per cent. reduction in effort. The Commission translated that into a 10-day tie-up per month. We got that reduced to eight days, for various reasons, partly because we thought that it was excessive.
We must have effective effort control. We cannot dodge that issue. That is why it is important that we enforce the rules effectively this year and that fishermen obey them because, if they do not, there is a danger that we will be faced with an even more draconian scheme next year which, like everything else, will go through on majority voting. We are anxious to avoid that. That is why it is important to make the proposals work this year.

Mr. Morley: During these exchanges hon. Members have expressed the need to link conservation measures with a reduction of effort. I was recently in Brussels to talk to the fisheries directorate-general, which expressed great surprise at the fact that, of all the countries in Europe, this country has not taken the opportunity of using the EC funds that are available for decommissioning schemes in order to reduce that effort. I agree that we need a package of measures and that, on its own, decommissioning would not be adequate. However, will the Minister give the House the undertaking that he will make it a priority to discuss with the industry a total package on conservation and, above all, on effort limitation, which would involve fair compensation for the fishermen who have suffered so much as a result of the measures to reduce the pressure on fish stocks?

Mr. Curry: My right hon. Friend the Minister has already begun that debate with the fishing industry. We accept that we can put together a package of measures that will be of benefit to the industry, and it is essential that we do so because we are talking about the long-term future of the stocks.
On the capacity problem, may I point out to the hon. Gentleman what I am sure he already knows: when we finally receive the figures for the first guidance programme from Brussels, we will find that the United Kingdom is over target by much less than was originally suspected. We do not have any idea about the targets for the second programme and, until we have them, it is clearly a little premature to talk about how we can reach a target that does not yet exist. However, we have begun discussions on a sensible package of proposals and we shall pursue them.

Several Hon. Members: rose——

Mr. Speaker: Order. We have spent rather a long time on fishing, but I recognise its importance. We must now get on more rapidly in the interest of those hon. Members who have questions on the Order Paper.

Whales

Mr. Archer: To ask the Minister of Agriculture, Fisheries and Food what representations he has received on the proposal at the International Whaling Commission to review the moratorium on the killing of certain species of whale.

Mr. Gummer: I have received a very great number of representations, many expressing appreciation of the Government's strong stand on the conservation of whales.

Mr. Archer: Although I do not dissent from that statement, will the Minister take the opportunity to confirm that our common ecological heritage is as much a legitimate subject of international law as our common security? Will he give an undertaking that the Government will do everything possible to give effect to the overwhelming consensus among civilised countries in favour of the continuing enforcement of the moratorium, if necessary by trade embargoes on those countries that ignore it?

Mr. Gummer: I have made it absolutely clear that there is no case for raising the moratorium and we are using every possible pressure to ensure that it continues. We have been successful in using the framework of the International Whaling Commission. It has a lot of faults and we want to extend its framework to cover some of the small cetaceans which some people believe are not covered, although we believe that many are. We have a lot of work to do and we should press on and make sure that the protection of whales continues.

Mr. Skinner: Introduce legislation and stop blubbering.

Mr. Gummer: It is all right for the hon. Gentleman to make comments from below the Gangway, but some of us take seriously the conservation of whales and do not make jokes about it.

Mr. Ashby: Does my right hon. Friend understand that most people in Britain find whaling abhorrent and extend that feeling to the fishing of porpoises? Countries such as Japan are fishing thousands of porpoises for no real reason. Is there any possibility of extending the moratorium?

Mr. Gummer: My hon. Friend is right, particularly about Dall's porpoise. The Japanese have carried out a major attack on that species and I am concerned to extend the controls. However, we have used the present framework effectively up to now. I am determined that we should use it more effectively in future. No one must be in any doubt about our commitment to the protection of the whale.

Dr. David Clark: Is the Minister aware that there is deep concern in Britain about what is regarded as the abuse of scientific whaling, especially by Japan? Will the Minister give us a categorical assurance that he will oppose commercial whaling and tighten up scientific whaling so that it is not abused by other countries in future?

Mr. Gummer: I made it clear as long ago as the conference in Brighton that the Government are wholly opposed to scientific whaling being used as a cover for commercial whaling. We shall continue to fight that. We are particularly concerned that not just one but a number


of nations have signified their intention to extend their whaling activities. In today's circumstances, that is clearly unacceptable.

Mr. Dickens: Does my right hon. Friend agree that whales are slaughtered throughout the world in barbaric ways and that the numbers of many species are getting rather low? The management of the slaughter of whales is deplorable. Will my right hon. Friend give the House an assurance this afternoon that he will not agree to anything until he is satisfied that those dreadful trends have been reversed?

Mr. Gummer: The history of monitoring and controlling whaling shows a very poor record. One reason why we are concerned about management proposals is that management has been very bad in the past. I see no sign that the problems are being overcome. We have succeeded much beyond our expectations so far. Our job is to make sure that we continue to do so.

EC Surplus Food

Mr. Cryer: To ask the Minister of Agriculture, Fisheries and Food if he will ensure that EC food distribution is available to all pensioners; and if he will make a statement.

Mr. Curry: I see no reason to provide free food for people like my noble Friend Baroness Trumpington or the hon. Gentleman's friend the chairman of Mirror Group Newspapers.

Mr. Cryer: When the Minister has finished with his little sneers at pensioners, does he realise that men and women who fought for this country in the war have queued up to find, when they get to the end of the queue, that they are denied butter which they have paid for, since the Government have handed over £14 billion to the Common Market in the past 10 years because of their arbitrary impositions? Would not it be a decent gesture to allow all pensioners to have that little bit of butter, especially since some charities—the public schools of this country, where the sons and daughters of the wealthy go—are also eligible for free butter?

Mr. Curry: The hon. Gentleman will be familiar with the scheme from his days in the European Parliament. He will be aware that there are 3,000 tonnes of beef and 3,800 tonnes of butter. He will therefore be able to do the mathematics. If they were distributed to all those eligible and all pensioners, they would each get the princely amount of 7·5 oz of beef and 9·5 oz of butter. If that is the gesture that we are about to make to them, I expect that I would get a gesture in return.

Mrs. Gorman: Although I have no objection to the distribution of surplus food to pensioners or anyone else, does my hon. Friend agree that pensioner families., like all others in this country, are now contributing £830 a year on average to the common agricultural policy and pensioners, like the rest of our families, would rather have that money in their pockets to spend on the food that they choose to buy?

Mr. Curry: I agree with my hon. Friend that the way to deal with surpluses is to tackle them at source so that they cost less to ordinary people and to those on relatively modest wages. The surplus should not be perpetuated and

then dished out free, because that is most inefficient. If there is food to be distributed, the United Kingdom will have its share and it will go to the poorest people in society, which is the right way to do it. I am determined that that should happen. However, the thesis that my hon. Friend proposes is the sensible one—not to produce surpluses in the first place, which would cost us all less.

Mr. Cryer: On a point of order, Mr. Speaker. In view of the totally inadequate answer to my question and the fact that the hon. Member for Birmingham, Northfield (Mr. King) described Bradford pensioners as stupid, I reserve the right to raise this matter on the Adjournment.

Mr. Holt: He has no right to do that.

Mr. Speaker: Order. Will the hon. Gentleman kindly contain himself. It is perfectly legitimate for the hon. Member for Bradford, South (Mr. Cryer) to say that he will raise the matter on the Adjournment. The hon. Member for Langbaurgh (Mr. Holt) has been here long enough to know the rules.

Mr. Holt: I am right.

Mr. Speaker: Unless the hon. Member for Langbaurgh (Mr. Holt) contains himself I shall have to ask him to leave the Chamber for this afternoon. Will he please be quiet.

Common Agricultural Policy

Mr. Andrew Welsh: To ask the Minister of Agriculture, Fisheries and Food what recent discussions he has had with his European counterparts on the reform of the common agricultural policy.

Mr. Gummer: The reform of the common agricultural policy was considered at the meeting of the Agriculture Council on 22 and 23 April, where discussions concentrated on the Commission's 1991 agricultural price proposals.

Mr. Welsh: This is beginning to get close to "The Muppet Show".
When the Minister meets his European counterparts, will they do something about the plight of the soft fruit industry, especially the Scottish raspberry industry, which is under threat from a flood of cheap eastern European imports? Is he aware of the importance of raspberries, not only in terms of direct employment but for the transportation industries? Will he obtain an extension of the minimum import price system until the end of this year and, in the long term, seek to maintain a stable market through quantitive controls?

Mr. Gummer: The hon. Gentleman will know that my hon. Friend the Member for Tayside, North (Mr. Walker) has kept that matter very much in my mind. Therefore, on every occasion when it has been possible I have raised the matter in the European Community. I have obtained a further extension of four months, but that is not enough. However, more important than the extension is ensuring that it is monitored. The hon. Gentleman will know that I have strong objections to the way in which the Commission has so far failed to monitor properly the arrangements which it put in place at our insistence. I am perfectly well aware of the importance of the Scottish raspberry industry and the soft fruit industry to the United Kingdom. We need to provide a market for eastern


European products and to insist that that market is at a price similar to that which we get at home. Otherwise the benefit goes to the processor, not to the eastern European country. The disbenefit is to the British farmer. I am determined that, as far as it is possible to find new ways to press the European Commumnity, we shall do so. I believe that the Commission has let us down on this issue.

Mr. Hunter: In the light of continuing arguments in some circles that nitrogen quotas should form part of a reformed CAP, may I ask my right hon. Friend to take this opportunity to explain his continued opposition to that argument?

Mr. Gummer: I could give my hon. Friend a large number of reasons. First, it could not be policed; secondly, what does one do about natural nitrogen that comes from farmyard manure; thirdly, how do we make sure that others keep the rules, even if Britain were able to police such a system; fourthly, how could one ensure that it was a fair system; fifthly, how would rationing be done in countries where the authorities have no idea what people used in the previous year, anyway; and, sixthly—well I could give a number of other reasons which would all go to show that the system would be unworkable.

Dr. David Clark: Does the Minister realise that while Opposition Members support the Government in resisting the details of the MacSharry proposals for the reform of the CAP, we still believe that there must be a fundamental reform if we are to get a fair deal for the British consumer and farmer? The Minister should take the high ground. Will he take the offensive and table his proposals for reform of the CAP so that we can start arguing on our terms rather than on MacSharry's terms?

Mr. Gummer: I hope that the public recognise that the hon. Gentleman's willingness to advise others stops short of his willingness to learn that proposals cannot be tabled at the EC in that way. Proposals are tabled only by the Commission. I am determined to see that the Commission's new proposals contain our suggestions. I have put those proposals forward absolutely clearly.
Perhaps the hon. Gentleman will answer a question that is now being widely asked. In the event of there being a future Labour Government who would cut spending on the national health services, as the right hon. Member for Islwyn (Mr. Kinnock) said yesterday, how much would the hon. Gentleman cut from the support given to farmers?

Animals (Live Exports)

Mr. Harry Greenway: To ask the Minister of Agriculture, Fisheries and Food when he expects final decisions to be taken regarding the future of minimum values on the export of live horses and ponies; and if he will make a statement.

Mr. Burns: To ask the Minister of Agriculture, Fisheries and Food when he expects the draft directive on the transportation of live animals to be next discussed at a meeting of the European Community Council.

The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. David Maclean): EC discussions have recently resumed on the welfare of

animals during transport, but we will resist most strongly any proposals to resume the export of live horses and ponies.

Mr. Greenway: Is my hon. Friend aware of the passionate concern that exists across the country about the continued pressure on the Commissioners to end minimum values in 1992 on the export of live horses and ponies? Animals would end up being brutally and viciously slaughtered if they were exported in that way. Will he shake up the EC and seek an early assurance that if the EC's present plans go forward, horses and ponies will not be exported from this country after 1992 in such an inhumane way?

Mr. Maclean: The only good thing about the present proposals is that they unite the Government and all the welfare organisations, including excellent bodies such as the International League for the Protection of Horses. I assure my hon. Friend that we are in harness on this issue, along with all the British people, in arguing to keep our specific minimum value proposals. I am not interested in getting an early decision from Brussels. I am determined to get the right one and that should be that we do not have to resume the export of live horses and ponies.

Mr. Burns: Is my hon. Friend aware that my constituents in Chelmsford warmly welcome the efforts that are being made by him and his Department on minimum values, but are disgusted and dismayed at the prospect of the live exportation of animals across the continent as a result of EC measures? In view of the improvements in refrigeration in the 30 years since the signing of the treaty of Rome, why must animals be subjected to such inhumane transportation practices, despite the efforts that are being made by the Ministry of Agriculture, Fisheries and Food improve the arrangements? We beg the Minister to fight hard in Europe to put an end to this Euro-nonsense.

Mr. Maclean: Animals have been and can be transported safely across international boundaries. Britain has had the most comprehensive detailed regulations on the safe transport of animals for many years. We take as our starting point in EC negotiations the excellent British regulations and we suggest that they should be the basis on which the EC comes up with proposals on the movement of animals to apply to the whole of Europe. We are also keen to encourage an EC-wide inspectorate so that the high standards of animal welfare that we enforce in this country will be enforced throughout Europe.

Mr. Corbett: I welcome the fact that the Minister is so firmly opposed to the export of ponies and horses, but why does not he apply his opposition to the transport of calves and sheep? Will he acknowledge that it is impossible for this country to ensure that the arrangements and regulations in place in the rest of Europe are enforced? Would not it be sensible to promote a policy of slaughter as near to the point of production as possible?

Mr. Maclean: We have always transported cattle and sheep safely and believe that it can be done. The hon. Gentleman should realise the conditions of the EC treaty, under which we have no power unilaterally to ban the transport of live animals. We make a distinction in the case of horses and ponies, however, because we believe that, from a welfare point of view, they are quite distinct. The


sad, sordid history of their export shows that they cannot be transported safely but only at great risk of damage. Cattle and sheep can be moved safely round the country and are moved safely from Ireland and the Scottish islands to the mainland. We must be very careful before seeking a unilateral ban on the safe movement of animals which would severely disadvantage many parts of the United Kingdom.

Mr. Pike: Does the Minister accept that, although he has widespread support in resisting moves to transport horses and ponies, it is essential that he makes no concessions in securing the best possible transport of animals or with regard to ponies and horses? The House will accept no concessions. Should not the Government be doing more to encourage the transportation of meat by hook rather than on the hoof?

Mr. Maclean: I cannot dictate to consumers, particularly European consumers, in what form they should eat their food. Although I sympathise with the view that much more meat could be safely transported in carcase rather than live form, it is a fact of life that Europeans want a live meat trade and the EC treaty protects that wish. I assure the hon. Gentleman that we shall not enter negotiations with the view that we must start off with concessions, as that would not be sensible. Rather, we shall enter those negotiations on the basis that the excellent British rules have served us well, that they should be extended to the rest of Europe and that we do not intend to give way on the issue of the export of live horses and ponies.

Dame Janet Fookes: May I encourage my hon. Friend in his insistence on an international inspectorate for the export of animals throughout Europe? However, does he agree that unless those inspectors are given real powers, their existence will be useless?

Mr. Maclean: I wholly agree with my hon. Friend. Our experience of the EC international inspectorate for abattoirs suggests that those inspectors have considerable powers and that their powers work. We would wish for no less on the animal welfare front. Britain has nothing to be ashamed of and is among the countries with the best record on animal welfare in Europe. We would welcome an EC-wide inspectorate to enforce our high standards in other parts of the EC.

EC Expenditure

Mr. Ralph Howell: To ask the Minister of Agriculture, Fisheries and Food if he will list (a) overall European Commission expenditure as a percentage of overall European Community gross domestic product, (b) net European Commission expenditure on agriculture as a percentage of overall European Community gross domestic product and (c) the net United Kingdom expenditure on agriculture including net receipts from the European Commission as a proportion of United Kingdom gross domestic product, for the last year for which figures are available.

Mr. Gummer: The figures are 0·9 per cent., 0·6 per cent. and 0·24 per cent.

Mr. Howell: I thank my right hon. Friend for that reply. Does not it prove that some of the statements that he has

made about the high cost of agricultural support have been grossly exaggerated? Will he also bear in mind the fact that British agriculture is supported even less than European agriculture and we are spending less than a quarter of the amount on agricultural support than we were in 1960 and only half what we were spending in 1973 when we joined the EC?

Mr. Gummer: My hon. Friend must accept that the budget is likely to go up by 30 per cent. next year, which cannot be sensible in the present circumstances. It must be reasonable to bring the budget under control and ensure that a higher proportion of it reaches the farmers whom it is supposed to support. I do not think that we help the situation by arguing on the basis of the percentage of gross national product.

Oral Answers to Questions — PRIME MINISTER

Engagements

Ql. Mr. Janner: To ask the Prime Minister if he will list his official engagements for Thursday 9 May.

The Prime Minister (Mr. John Major): This morning I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall have further meetings later today.

Mr. Janner: Does the Prime Minister know of the grave shortage of resources that is affecting children's wards and units in hospitals throughout Britain? Is he aware that the unique baby life-saving unit in Groby Road hospital in my constituency is likely to have to close because there is no money locally and the Department of Health has refused central NHS funding? If that unit closes, as is almost certain unless the Government change their mind, what will the Prime Minister say to the parents of babies who will certainly die, totally unnecessarily?

The Prime Minister: As the hon. and learned Gentleman will know, I cannot carry in my head the details of each and every aspect of the national health service, but he knows that the average annual increase in the national health service budget has been more than 3 per cent. during the period of this Government—substantially higher than it was under any previous Government.

Sir Michael Shaw: If public spending is to be paid for in the future by increases in our economy, in the opinion of my right hon. Friend do policies of increased taxation, increases in quangos and Ministries and a minimum wage level make a sensible policy to increase such a demand?

The Prime Minister: I suspect that I know what my hon. Friend is driving at. The reality is that the Labour party would never deliver any growth whatsoever to fund increased public expenditure. It never has and never would and any suggestion that it would is sheer wish fantasy.

Mr. Kinnock: Has the Prime Minister seen the letter from the health authority district general manager to his clinical directors stating that
the reality of GPs holding their own … budgets
is that
equity has gone out the window"?


In view of that, will the Prime Minister withdraw the claim that he made in the House on Tuesday that operations are done on the basis of clinical need, as that claim is obviously fiction?

The Prime Minister: It is not fiction. Operations are done on the basis of clinical need. I have been advised within the last hour or so that the doctor to whom the right hon. Gentleman referred has also said that the big advantage of the trusts is that you are opting out of bureaucracy, not out of the national health service. At Bart's, the hospital at which he works, they are treating more patients at less cost. Over 1,000 jobs may have gone in the last five years, but more patients are being treated.

Mr. Kinnock: Since the Prime Minister also wants to quote Dr. Grant, I remind him that he is the man who said that they are opting out of equity. Can I put it to the Prime Minister again? Is not it clear that the Prime Minister's health market policies have now made queue-jumping the order of the day and that the clinical needs of patients are coming second to commercial considerations? I put it to him again. In view of that reality, on the testimony of Dr. Grant, will he now withdraw the false claim that he made two days ago that operations are done on the basis of clinical need? It is fiction.

The Prime Minister: No, I will not, and I will call in evidence to support my position Mr. Rowden, the chief executive of West Lambeth health authority, who writes to the press as a nurse, a general manager in the national health service and a member of the Labour party. I quote:
For Labour to suggest that the old-style district health authorities provided a sound basis for the management of the NHS is spurious to say the least. Decisions prior to the reforms were arrived at by a process of those who screamed the loudest, and we have all witnessed various displays of shroud-waving … This was not a rational way of making difficult decisions, and perhaps the key benefit from the NHS reforms will be the evolution of a system that will lead to rational and informed debate about how and why we use precious resources in our NHS.

Mr. Kinnock: Like his predecessor, the more the Prime Minister goes on in his answers, the less convincing he becomes. May I put it to him again? Does not he agree with the testimony of one of his supporters, a district general manager, who says that because of his system equity has gone out of the window? Will not he affirm now that, as a consequence, operations are not being done on the basis of clinical need but on the basis of commercial considerations?

The Prime Minister: I neglected inadvertently to complete the quote from Mr. Rowden, the Labour party supporter. He deals with the point that the right hon. Gentleman now raises:
When all the politicking stops, it has to be said that many of the Government's changes to the NHS give us the first opportunity in decades to begin explicitly to make choices about where we spend our money in the UK health care system.

Mr. Harris: Will my right hon. Friend give an assurance that, unlike the Labour party, he will keep public expenditure in line with what the country can afford? Furthermore, as the First Lord of the Treasury, will he make available to Her Majesty's Opposition the full facilities of the Treasury to check out their taxation and spending plans, as clearly their sums do not add up?

The Prime Minister: I can certainly give my hon. Friend the assurance that he seeks. Our economic policies in the last 12 years have achieved a remarkable treble—tax cuts, spending increases on public services and a reduction in the national debt. The extra £20 billion that Labour promises is spending that it could never deliver out of growth which it has never previously provided when in government. The only things that would grow under the Labour party would be taxes, inflation and national health service waiting lists, just as they always have done.

Mr. Ashdown: Does the Prime Minister realise that while the scale of international relief in Bangladesh is still pitiful in relation to need, there is nevertheless real pride about Britain's lead in providing it? I again ask the Prime Minister why it is that he, his Government and, it appears, the written press continue to ignore the incalculably greater scale of the disaster now unfolding in Africa? I want the right hon. Gentleman to assure the House that he knows and understands that 27 million lives are imminently at risk and that in some areas food will run out at the end of this week. If he knows about these matters, will he tell the House what he intends to do to help?

The Prime Minister: I am grateful to the right hon. Gentleman for what he said in the first part of his question. The assistance that we have given to Bangladesh has made us the largest single national donor. We are prepared to do more and are urging others to do more. Particularly in the months ahead we will need to seek a better international way of co-ordinating assistance when great tragedies such as this are faced. I shall do what I can to bring that sort of system about. On the subject of Africa, I remind the right hon. Gentleman that we are providing substantial aid and providing it fast. After the United States, we are the second largest bilateral food aid contributor to the Horn. We have done a great deal and, where necessary, we will be able to do more. However, we cannot do everything that is necessary on our own. We have a better record than almost anyone in the world and we can justly be proud of that record.

Mr. Butcher: Is my right hon. Friend aware that 12 years ago to this day he and I first entered the House? I congratulate my right hon. Friend on his personal dedication and commitment to an improvement in public services throughout that period. If the history of the 1980s shows anything it is that it is possible to reduce taxation while simultaneously and dramatically improving public services.

The Prime Minister: My hon. Friend is quite right about that. Perhaps I may take this opportunity to welcome my hon. Friend back to the House after his illness. We are all very pleased to see him here and looking so fit and I look forward to seeing him sit here with me for at least another 12 years and possibly a good deal longer. My hon. Friend is absolutely right. Such improvements depend on the levels of growth that we have achieved over the last decade, which levels Conservative Governments traditionally achieve and Labour Governments fail to achieve.

Mr. Andrew Welsh: To ask the Prime Minister if he will list his official engagements for Thursday 9 May.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Welsh: As the Secretary of State for Scotland and the Secretary of State for Energy both oppose test drilling by Nirex in their constituencies, does the Prime Minister understand why the people of Scotland do not wish to see up to 6,000 planned test boreholes being drilled in Caithness? If Nirex proposes to spend such time, effort and money in drilling up to 6,000 boreholes, how can the Prime Minister expect anyone to believe that Nirex has not targeted the north of Scotland as a nuclear dump? Scotland has been badly let down by this decision.

The Prime Minister: As the hon. Gentleman will know, there will need to be quite specific planning consents before there can be any dumping of waste there. That matter lies in the future, but before any dumping at all could take place after the test borings, quite specific planning consents would need to be granted. We will look carefully at those when they come forward.

Mr. Beaumont-Dark: To ask the Prime Minister if he will list his official engagements for Thursday 9 May.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Beaumont-Dark: Will my right hon. Friend accept that when we came to office 12 years ago the top rate of taxation was 82 per cent., that it is now 40 per cent. and that the miracle has happened because everyone has been encouraged to work harder which has meant that £17 billion more has been spent on the health service this year than when we came to office? Does he agree that a nightmare will strike people such as a police sergeant, a deputy head teacher or a doctor when they hear that if they earn £20,300 a year they are among the rich and are to be taxed and taxed and taxed again.

The Prime Minister: That would certainly do nothing but damage to enterprise; and it is certainly true that, over the past few years, lower rates of tax have produced a higher yield.
My hon. Friend is right about people earning £20,000 a year. In no sense can they be described as rich. Last year in London and the south-east £20,000 was less than the

average white collar wage and it will certainly be much less this year. It is less than many Metropolitan police constables and sergeants, senior house officers, registrars or junior doctors earn. It is less than many teachers earn. Those are the people whom the Opposition regard as rich and whom they would tax not only unreasonably but as they did in the 1970s: right out of this country.

Mr. Ron Brown: To ask the Prime Minister if he will list his official engagements for Thursday 9 May.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Brown: As the poll tax has been a big mistake, why should people be hounded and imprisoned in England? Why should they suffer because the Government got it wrong? People outside think that something has to give—that there should be an amnesty. The Government should understand the position of the 16 individuals in England—[Laughter.] It is not funny.

Mr. Speaker: Order. This does not help the hon. Gentleman. Briefly, please.

Mr. Brown: Those 16 people are in prison because they did not pay the poll tax. We know that the Prime Minister claims to want a classless society—[Interruption.]

Mr. Speaker: Order. Will the hon. Gentleman now conclude his question?

Mr. Brown: This is important, because people cannot be imprisoned in Scotland but they can be in England. Let us free these political prisoners. That would be an important decision.

The Prime Minister: I know that the hon. Gentleman feels deeply about these matters, but I must point out that he did not even carry his own side of the House with him in his remarks.

Mr. Gerald Howarth: On a point of order, Mr. Speaker——

Mr. Speaker: Order. The hon. Gentleman knows that I take points of order after Question Time.

Business of the House

Mr. Bruce Grocott: Will the Leader of the House tell us the business for next week?

The Lord President of the Council and Leader of the House of Commons (Mr. John MacGregor): The business for next week will be as follows:
MONDAY 13 MAY—Motion for spring Adjournment.
Motion on the Coal Industry (Restructuring Grants) Order.
The Chairman of Ways and Means has named opposed private business for consideration at seven o'clock.
TUESDAY 14 MAY—Opposition day (11th allotted day). Until about seven o'clock there will be a debate described as "The damage caused to the NHS by the implementation of the National Health Service and Community Care Act". Afterwards there will be a debate described as "The need for improved policies to deal with famine, flood and refugees in the world". Both debates arise on Opposition motions.
WEDNESDAY I5 MAY—Debate on a motion to approve the Government's public expenditure plans for 1991–92 to 1993–94 (Cm. 1501 to 1520).
Motion relating to the Education (Grant-Maintained Schools) (Finance) Regulations.
THURSDAY I6 MAY—Remaining stages of Planning and Compensation Bill [Lords].
FRIDAY I7 MAY—Private Members' motions.
MONDAY 20 MAY—Consideration of Lords amendments to the Disability Living Allowance and Disability Working Allowance Bill.
The Chairman of Ways and Means is expected to name opposed private business for consideration at seven o'clock.
The House will also wish to know that European Standing Committees will meet on Wednesday 15 May at 10.30 am to consider European Community documents as follows:—
Committee A—Document No. 5491/91 relating to milk quotas.
Committee B to continue to consider document No. 8597/90 and COR 1 relating to unfair terms in consumer contracts.

[Wednesday 15 May

European Standing Committee A

Relevant European Community Document

5491/91—
Milk Quotas: Outgoers (ECJ Ruling)

Relevant Report of European Legislation Committee

HC 29-xvii (1990–91)

European Standing Committee B

Relevant European Community Document

8597/90 + COR 1
Unfair Terms in Consumer Contracts

Relevant Reports of European Legislation Committee

HC 11-xxxiii (1989–90) and HC 29-xii ( 1990–91)]

Mr. Grocott: May I thank the Leader of the House for arranging, for next Wednesday, a debate on the Government's public expenditure plans? I am afraid that that is the only thing for which I shall be able to thank him.
I know that what I am about to say upsets the right hon. Gentleman and that he will be annoyed again today, but

I have to point out that the Government are running out of steam. Why is it that the two key debates next week—the one on the crisis in the health service, and the one on the famine in Bangladesh and Africa and the problems facing the Kurds—have been arranged by us in Opposition time, and that the Government have arranged no major debates on national issues in Government time? As the Leader of the House is running short of ideas, I put it to him that, for a start, it is high time we had a debate on unemployment. Yesterday, 10,000 redundancies were announced at British Coal and Rolls-Royce, making 15,000 in the last 15 days.
It is also high time for a debate on the education service. The Prime Minister seems to think that that service is important, but not important enough for a debate. Let me make an offer to the Leader of the House: if he cannot think of key issues for debate, let him hand over the precious parliamentary time to the Opposition, and we shall choose the subjects.

Mr. MacGregor: Once again, the hon. Gentleman has got himself completely in a twist. He really cannot make that case. After all, I have been urged for some time by his hon. Friend the shadow Leader of the House to arrange a debate on public expenditure plans. According to the hon. Gentleman, we are wasting the time of the House next week by doing just that. It is absolutely ridiculous. As I have told the hon. Gentleman before, I am keen to have a debate on public expenditure plans. I am anxious that we should have a whole day to compare the Government's achievements in public expenditure with the nonsense that the Labour party talks. I am glad to have been able to provide such an opportunity. When the hon. Gentleman himself has asked for the debate, he cannot accuse me of wasting the time of the House.
As to the point about unemployment, I need only remind the hon. Gentleman of the spring Adjournment debate. As he knows, I have an obligation to find time for such a debate, which provides an opportunity to raise these matters. I hope that the hon. Gentleman is not saying that the Planning and Compensation Bill is unimportant. In fact, it is an extremely important part of the Government's legislative programme, welcomed by very many people. The same is true of the Disability Living Allowance and Disability Working Allowance Bill. The hon. Gentleman is trying to score cheap points, and he is completely off target.

Mr. Nicholas Budgen: Will my right hon. Friend make arrangements for a very early debate on the document issued on 3 May by the presidency of the intergovernmental conference on European political union? Will he ensure that in such a debate a Government spokesman will comment on the section about a proposed European foreign policy, which might be held together by qualified majority voting? Will he please make sure that the Government will emphasise that, while they are prepared to be polite and correct to our allies in the EC, they have set their face like granite against ceding any more sovereignty from this House, this Parliament and the British people to the institutions of the EC?

Mr. MacGregor: I cannot promise my hon. Friend an early debate on the IGC in particular. However, he will know that we have regular debates on European


developments. I hope, shortly after the recess, to be able to arrange such a debate, in which all these points may be discussed.

Mr. James Wallace: Can the Leader of the House confirm the rumour that the Government are to set up a Northern Ireland Select Committee? Such a Committee would be very welcome indeed, but would seem rather out of place in view of the fact that the Government have failed to set up a Scottish Select Committee.
On the subject of Select Committees, will the right hon. Gentleman find time to debate the very valuable report from the Select Committee on the Environment on the tropical rain forest?

Mr. MacGregor: I have indicated that I recognise that the second subject is obviously very important, but it is a question of finding time, because we are debating many important subjects both in legislation and in ordinary debates at the present time. On the first point, I draw the hon. Gentleman's attention to the Government's response to the Committee on Procedure's report on Select Committees, from which he will see very clearly our position on the Northern Ireland Select Committee.

Sir Robert McCrindle: As it is now some years since the House held a debate on civil aviation, and in view of the many changes that have taken place since that time, ranging through matters of regulation, competition and, indeed, safety, would. not it be appropriate for us to hold a debate on this important matter at the earliest possible moment?

Mr. MacGregor: I have noted my hon. Friend's request, but, while in no way wishing to diminish the importance of the subjects that he raises, I do not think that it will be possible for me to find time for a full debate on these matters in the near future. There are, of course, a number of other ways in which they could be raised in the House, including the motion for the spring Adjournment next Monday.

Mr. Peter Shore: Is the Leader of the House aware that his right hon. and hon. Friends in the Foreign Office still decline to publish the text of the draft treaty on political union? It so happens that the text of the treaty is available in the Library owing to the initiative of the Library in obtaining it, which makes this an absurdity as well as an insult to the House. Will the right hon. Gentleman consider very carefully indeed what further progress can be made in getting Ministers to make periodic reports to the House on the state of the negotiations as they proceed, as the right hon. Member for Old Bexley and Sidcup (Mr. Heath) did when he was Prime Minister and we were negotiating the original treaty of British entry?

Mr. MacGregor: As far as the document is concerned, as the right hon. Gentleman knows, he and I and my hon. Friend the Minister of State, Foreign and Commonwealth Office, have had a number of exchanges on this in the past few weeks in an attempt to find a solution acceptable to the House. As he also knows, this is an intergovernmental conference and it would he wrong for the Government to deposit negotiating texts while it continues. We did not do so during the negotiations on the Single European Act, and the presidency has enjoined member states not to

publicise conference texts. However, that negotiating draft text did get into the public domain and that is how it is now in the Library.

Mr. Peter Fry: Will my right hon. Friend reconsider his reply to my hon. Friend the Member for Brentwood and Ongar (Sir R. McCrindle)? Civil aviation has not been debated for a long time and it is now clear that negotiations are commencing to replace the agreement between this country and the United States, Bermuda 2. In view of the controversy that has surrounded recent negotiations, is it not time that the House had an opportunity to put its view forward to guide Her Majesty's Government?

Mr. MacGregor: I have certainly noticed my hon. Friend's comments in support of my hon. Friend the Member for Brentwood and Ongar (Sir R. McCrindle) and I will draw them to the attention of my right hon. and learned Friend the Secretary of State for Transport. However, there are other ways in which these matters can be debated in the House and a ministerial reply can be given. I must be honest with my hon. Friend: I think that it will be difficult to find Government time for a full day's debate in the near future.

Mr. Nigel Spearing: Reverting to the topic of the non-publication of this so-called non-paper, which is, in fact, a draft treaty of political union, is the Leader of the House aware that the authorities of the House, using their ingenuity, have obtained a copy from the library of the Luxembourg Parliament? Does he agree that the House should be at least as well officially informed as any Parliament of any of the member states of the EEC? Why should proposals on the important subject of the welfare of animals, about which we are all concerned, be available and be debated in the House when working documents concerning the constitution of a new pan-European state are kept secret?

Mr. MacGregor: I have already described the previous practice on these matters and that is what we have followed in this case. The hon. Gentleman knows that I try to help the House whenever possible. We have endeavoured to make arrangements to ensure that some of these drafts are available in the Library to hon. Members, including the hon. Gentleman and his right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore).

Mr. Terence L. Higgins: Is my right hon. Friend aware that the present practice is simply not acceptable to the House? The position on the draft treaty on economic and monetary union is the same. It is absurd for the presidency to say that it will not release the papers. The House is unable to have official knowledge of them although they are circulating far and wide throughout the Community. Will he ensure that the Government make representations to the presidency to say that this is an intolerable situation and that we will not put up with it?

Mr. MacGregor: I will certainly discuss the matter further with my hon. Friend the Member for Watford (Mr. Garel-Jones), the Minister of State, Foreign and Commonwealth Office. Clearly, I tried to ensure that hon. Members who wish to follow these matters in detail are able to do so because the documents are now accessible to them.

Mr. Alfred Morris: The right hon. Gentleman wrote to me recently about the report to the Government on resettlement grant. Can he say now when he intends to table the necessary motion, or will he be able to do so early next week?

Mr. MacGregor: I am grateful to the right hon. Gentleman for raising that point, because I know that it is a matter of concern to many hon. Members. As he knows, I announced that we had received the review by the Top Salaries Review Body on resettlement grant, which has been placed in the Library of the House. I have made it clear that it will be my intention to bring forward the necessary resolution to implement that recommendation, because it will widely commend itself to hon. Members of all parties. I very much hope that I shall be able to table the resolution and that it will be agreed by the House, if it so wishes, before the Whitsun recess.

Mr. Peter Bottomley: May I thank my right hon. Friend for rearranging the adjourned debates in European Standing Committee B? May I also ask him whether he can find some way to inform the House and those whom the hon. Member for Greenock and Port Glasgow (Dr. Godman) calls the permanent members of such Committees of what is likely to come up in future? Will my right hon. Friend also find some way to let such information be known to outside groups, because I fear that only those advised by expert lobbyists will be able to get their views to the hon. Members who will consider some of the draft directives? In practice, outside groups should know what is going on here and in Europe without having to pay others to tell them.

Mr. MacGregor: Yes, I suspect that some of the problems about advance information also occurred when these matters were normally debated on the Floor of the House. I take my hon. Friend's point. It is desirable that as much notice as is realistic in all the circumstances should be given to members of the Standing Committee. I said earlier that I should like that to happen and I am pursuing the matter further to ensure that it does. I should be happy to listen to members of the Standing Committee on such matters, because my hon. Friend makes a reasonable point.

Mr. Roy Beggs: I am sure that the whole House would want to avert another mini-De Lorean scandal in Northern Ireland. There is perceived to be a veritable can of worms relating to the stewardship of Northern Ireland Electricity by its chief executive. Can the Leader of the House make time available for the Secretary of State for Northern Ireland to make a further report on NIE so that we can ask him whether he has confidence in that board, whether he has confidence in the chief executive and in his ability, and whether he is likely to reappoint him in view of the heavy rumour that the NIE board does not intend to reappoint the chief executive? That would also afford us the opportunity to ask the Secretary of State whether it is his intention to reappoint the deputy chairman when his contract comes to an end later this year.

Mr. MacGregor: I will draw the hon. Gentleman's remarks to the attention of my right hon. Friend the Secretary of State for Northern Ireland. I am afraid that I do not know the details of those matters.

Sir Dudley Smith: In view of the scurrilous and inaccurate reports in some of the tabloid newspapers this week about the working hours of Members of Parliament, does my right hon. Friend think that it is time that we had a high-profile debate on the accepted duties of Members of Parliament, on the hours that we work in this place and on the necessary reforms which need to be considered soberly and carefully sc that we can, perhaps, bring ourselves more up to date? Such a debate would impress on the public the fact that Members of Parliament, by and large, do a good job.

Mr. MacGregor: I do not think that we need a debate on how Members of Parliament fulfil their duties. My hon. Friend makes two points. I should be happy to agree with him that the amount of time that we spend in the Chamber or in Parliament itself does not reflect the amount of time that we spend on our duties as Members of Parliament. As an example of that, I—and I am sure that this applies to many other hon. Members—spent a large number of hours over the weekend in constituency engagements on a bank holiday. It is necessary to keep repeating that the duties of Members of Parliament are not just reflected by the amount of time they sit in the Chamber.
With regard to reforms, I have said that I am considering those matters and I hope to come forward with some thoughts in due course. However, some of the reforms that we have carried through in this Parliament, such as the European Standing Committees, are already having an effect on the hours in this Chamber.

Mr. Jeremy Corbyn: Will the Leader of the House make time available as soon as possible for a debate on the Government's policies towards the middle east in view of the continuing problems facing the Kurdish and Palestinian peoples? Will he ask the Government to reconsider their policy towards non-recognition of the right of Kurdish people to self-determination? Many people believe that peace in the region can come only when the rights of people such as the Kurds are recognised. That will be the key to a long-term and just peace in the region.

Mr. MacGregor: I am not sure when it might be possible to have a full-day's debate on that subject. As I have said, the Government are keen to keep the House fully informed about developments. I will bear in mind not the hon. Gentleman's point about the particular policy proposals, but his point about the possibility of a debate.

Mr. Nicholas Soames: May I return my right hon. Friend to the question about European debate and the intergovernmental conferences? Is my right hon. Friend aware that in the saloon bar of almost every pub in my constituency, and at Eton college debating society and in Lady Antonia Fraser's drawing room, those matters are discussed daily with anxiety? Why is it uniquely that this House, which is and should be the authority to allow the Executive to proceed with those negotiations, is not permitted to address those matters that are fundamental to the constitution of this country?

Mr. MacGregor: I am not familiar with the discussions that take place in all the areas to which my hon. Friend has referred. However, I am aware that those matters are frequently discussed within the precincts of the House and there are opportunities to question my right hon. Friends.


The Select Committee on Foreign Affairs will shortly do that in a session with my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs.

Mr. Greville Janner: Does the right hon. Gentleman recall that in his excellent interview titled "The Challenge of Conjuring" in this week's House Magazine he states:
My first love really is mind-reading.
In those circumstances, did he know that I was going to ask him for a debate about American pitbull terriers and the serious problem whether fighting dogs of that kind should, as the Leicester Mercury so rightly demands, be banned because of the danger that they cause, as revealed in the disastrous injuries caused to a man who is at present being treated in the Leicester royal infirmary?

Mr. MacGregor: It did not require much mind-reading to know that the hon. and learned Gentleman was going to quote the Leicester Mercury. As he is aware, legislation is already in place to put down any dog that is dangerous. Furthermore, any owner who fails to take action about a dangerous dog can be banned from keeping a dog in future. Because the Government recognise that there may be a need to extend the law further, we issued a consultation paper last year entitled "The Control of Dogs" which contained several specific proposals. We have received a diverse range of views in response to that. My right hon. Friend the Home Secretary will announce his proposals this summer.

Mr. John Wilkinson (Ruislip-Northwood): May I remind my right hon. Friend of the statement made in the House a few weeks ago by my right hon. and learned Friend the Secretary of State for Transport on the civil air transport regulations? Since then, they have had a considerable impact and there are also major policy implications and employment considerations. If my right hon. Friend cannot allow a full-day's debate in Government time, can he at least allow a half-day's debate on civil air transport policy?

Mr. MacGregor: I do not think I can add to what I said earlier. Half days are in quite short supply in some respects as well. There are quite a large number of matters that hon. Members want to raise in the House. As I said earlier, I will bear in mind the point that my hon. Friend raised.

Mrs. Margaret Ewing: Given the right. hon. Gentleman's welcome comment that he will consider the reform of the working processes of this place, what consideration will he give to the decentralisation of decision making, particularly against the background in which support for the independence of Scotland is rising, and even one third of the tattered remnants of his own party want constitutional change? Will he seriously take that matter on board?

Mr. MacGregor: I was in Perth last night discussing some of those matters with a lot of my friends in the party in Scotland. On my way back this morning, I noticed a headline in The Scotsman suggesting that there was some change in attitudes to such matters as a result of a recent poll.

Mr. Richard Tracey: In order to make next week's debates totally useful, will my right hon. Friend use his best endeavours to persuade the Opposition to give some figures for their policies and tell the House and the

country whether extra taxation would be needed to pay for them? My right hon. Friend will agree that it is dishonest for the Opposition constantly to hold out promises without giving any figures and that, without such details, our time in such debates would be wasted.

Mr. MacGregor: My hon. Friend makes a very good point, and I hope that that will be clear in next week's debates on the national health service. It is clear to me from what the Leader of the Opposition said last night that he does not understand what has been taking place in the health service in recent years and does not understand public spending. It is quite clear that the very substantial increase—over 53 per cent. in real terms—which we have achieved in NHS spending has arisen partly as a result of the priority that we have given it and partly as a result of economic growth. He could not do better—he would do worse.

Mr. Tony Banks: Since the Leader of the House is so good at mind reading, does he know the question that I am about to ask him? He is obviously not as good as my hon. and learned Friend the Member for Leicester, West (Mr. Janner) thinks he is.
As a member of the Procedure Committee, I was encouraged by the Government's response to the Committee's report on the workings of the Select Committee system. When will the necessary changes in the Standing Orders come forward? Will we have a debate? Since it appears that the Government are running out of business—business has collapsed on the past two evenings—could we discuss some of the outstanding Procedure Committee reports, in particular the Joint Committee report on the workings of the private Bill system? That matter also needs to be sorted out, and we now have the time to do it.

Mr. MacGregor: The hon. Gentleman is wrong about running out of business. The two days to which he refers were the two days that were given to the Committee stage of the Finance Bill. In a number of previous years we have given three days, and we have sometimes been accused of not giving enough. This year there have been two days. As the hon. Gentleman will know, it is largely up to the Opposition how those two days are deployed. I was giving the House the normal amount of time. It is largely for the Opposition how that time is used. It is not a matter of the Government running out of business. I would have been much criticised if I had given less time to the Finance Bill on the Floor of the House.
On the Select Committee on Procedure, I confirm that I hope to be able to lay the orders fairly soon. That would be the appropriate time to have a debate on them. That is the proper way to proceed. I am very keen to do so because it is a very good report. As the hon. Gentleman knows, we accepted a large part of it and I am anxious to see it implemented.

Mr. Bob Dunn: Will the Leader of the House please arrange for an urgent, early debate on the workings of the grant-maintained schools provisions of the Education Reform Act 1988? That would enable the House to demonstrate to the people of this country the Labour party's commitment to abolish not only grant-maintained schools but grammar schools, city technology colleges, the assisted places scheme, Church schools and independent secondary schools, and to reduce


everything to the single common denominator of 11-to-16 comprehensive schools and tertiary colleges, thereby creating no choice whatsoever for the people of this country.

Mr. MacGregor: I agree 100 per cent. with my hon. Friend. He puts his points extremely well. I am happy to tell him that some of the points, at least in relation to grant-maintained schools, may be raised next week, because we shall debate regulations next Wednesday.

Mr. Dennis Canavan: Is it not time to have a debate on the report of the Scottish Constitutional Convention, bearing in mind that the Scottish constitutional question managed to reach the agenda of even the Scottish Tory party conference in Perth this week, and the fact that the opinion polls in today's Scotsman reveal that the overwhelming majority of Scots, including almost half all Scottish Tory voters, are in favour of some form of Scottish Parliament?

Mr. MacGregor: We had some extremely good debates yesterday in Perth. The hon. Gentleman knows that the issue of the Scottish Convention was not put forward by the Government. He also knows that there are other ways of raising in the House matters on which the Government cannot find time for a debate, including all the Supply days that are available to the Opposition.

Mr. Tony Marlow: While we are on the subject of constitutional issues, may we have a debate about the role and position of the Leader of Her Majesty's Opposition, given that his job security is more dependent on the well-being, prestige and the length of the membership rolls of the Confederation of Health Service Employees and of the National Union of Public Employees than on the effectiveness, efficiency and caring ability of the national health service? If we were to have that debate good and early, before the debate next week on the health service, might that be illuminating and set out some of the ground rules?

Mr. MacGregor: It would be in order for my hon. Friend to raise those matters in next week's debate.

Mr. David Winnick: If the Government are so confident of their case on taxation and benefits, why can we not have a debate on that as early as possible, in which we shall be able to show that a large majority of the people of this country are now paying more in taxation—in both direct and indirect taxation—[Interruption.] The Leader of the House is asking for information about the local election results, but he will not get any satisfaction in relation to my seat. Although the large majority of people are now paying more in both indirect and direct taxation, the fact remains that the richest I per cent. of the population are now paying £30,000 less per year than 12 years ago. Does not that show the unfairness of Tory policies? If the Government really want a debate on such subjects, we shall be only too pleased to have one as quickly as possible.

Mr. MacGregor: The hon. Gentleman wrongly read either my mind or my lips. I was trying to find out whether he was present for our debates on the Finance Bill, where the issues——

Mr. Winnick: I was not.

Mr. MacGregor: The hon. Gentleman says that he was not here for our debates on the Finance Bill——

Mr. Winnick: I was attending the British-Irish parliamentary body.

Mr. MacGregor: Well, that cannot have been running through both the Second Reading and Committee stages of the Finance Bill. The plain fact is that we have recently had three days in which all those issues could have been fully raised if the hon. Gentleman had wished, so I do not intend to find another day. However, his point about higher-rate taxpayers entirely misses the point, which is that, as a result of our changes in higher rate taxation, the yield from higher income earners is now very much greater than under the Labour Government. I wonder whether the hon. Gentleman is suggesting that his own party should go back to the disastrous tax regime of Labour's period in government.

Mr. James Pawsey: Is my right hon. Friend aware of Warwickshire's difficult position because of the reductions in revenue support grant and because of being community charge-capped? Is he further aware of the damage that is likely to be done to education in the county of Warwickshire as a result of the reductions in funding for schools? Will he therefore allow us an early debate on this matter next week?

Mr. MacGregor: Not next week, but I shall find time fairly soon for the general issue of capping to be raised.

Mr. Dennis Skinner: Did the Leader of the House see the article that stated that he was going to make an announcement that the House would rise on 15 July until 22 October? In view of all the representations that have been made today for debates on Bangladesh, and on unemployment and all the rest, will he ensure that we do not get those suggested extra weeks so that we can have all those debates? We could have a debate on the Common Market and another vote on the Single European Act so that all those Tory Members who now have misgivings about the Common Market could join those Opposition Members who voted against the Single European Act and tell the Common Market to get lost.

Mr. MacGregor: As the hon. Gentleman knows, not for the first time I disagree entirely with his stance on European issues as well as on many others. Of course, those issues can be debated in June when I hope we shall have a full day's debate on developments in the European Community. We all get used to seeing speculative stories in the newspapers about the rising of the House. I simply do not know where that one came from as I have made no announcement.

Mr. Michael Brown: Will my right hon. Friend reconsider the debate on the Government's public expenditure plans for 1991–92 to be held next Wednesday? Following the point made by my hon. Friend the Member for Surbiton (Mr. Tracey), my right hon. Friend said that it would give us the opportunity to compare and contrast the Government's plans with those of the Opposition. However, for us to make that comparison, is it not necessary for us to have the Opposition's public expenditure plans on public display for every Member of Parliament and everyone outside this


place? We can have no constructive debate on Wednesday unless the Opposition publish their proposals which so far they will not do. What is the point of the debate?

Mr. MacGregor: The debate on Wednesday is about our public expenditure plans which are real, financable at present levels of taxation, and I believe have absolutely the right set of priorities. As my hon. Friend knows, there have been real and significant increases in expenditure. The debate on Wednesday is about ours, but I see no reason whatsoever why my hon. Friend should not raise the points he has made then. Certainly we shall continue doing so time and again in the weeks and months ahead.

Mr. Bob Cryer: Will the Leader of the House arrange for a statement next week from the Home Secretary in regard to early-day motion 691 which concerns the importation of powerful and potentially dangerous and brutal dogs?
[That this House draws attention to the proposal to import a second Japanese Tosa dog for breeding purposes; notes that this species of dog grows to 17 stone and was originally bred for fighting; and calls on Her Majesty's Government to propose amendments to the law so that the import of new breeds of dog may be prohibited if it is against the public interest by virtue of the size, nature and purpose of the animal and so that, where appropriate, even where dogs are imported conditions may be attached to import licences as to the custody and breeding of such animals.] Does he realise that the Department of the Environment already has powers passed by the House to introduce a dog registration scheme which will enable those potentially brutal and vicious dogs to be registered and traced and the owners to be given guidance and advice and any potential visitors warned about the dangers? The Bradford Telegraph and Argus and the Yorkshire Post have carried a number of stories—[Laughter.] Although hon. Members may find this amusing, some people have been savagely attacked by dogs such as American pitbull terriers, alsatians and doberman pinschers which have been allowed to roam loose. It really is time that the Government did something about it. They have the appropriate powers and we should not be waiting for vague statements from the Home Secretary at some vague future date.

Mr. MacGregor: I do not think anyone was finding the subject of the hon. Gentleman's remarks amusing. It was simply because a smile flitted across his face when he mentioned the Bradford Telegraph and Argus that others responded in like fashion. I am sure that he will accept that we all take the matter extremely seriously. As I have already said, there is legislation to put down any dangerous dog. We have received a wide range of comments on the consultation paper and I am sure that my right hon. Friend the Home Secretary will wish to make a statement as soon as he can.

Mr. Jonathan Sayeed: Will my right hon. Friend confirm that Wednesday's debate on the Government's public expenditure plans will provide the Government with an opportunity to confirm that they will continue to fund spending on defence at a level which enables us to deal with an uncertain and unstable world and that they have no intention of following the Labour party's plans to slash defence expenditure by £9,000 million a year?

Mr. MacGregor: One of the documents to which I referred in my announcement about business relates to our defence expenditure plans which are clearly set out. I have no doubt that they will be referred to in Wednesday's debate.

Mrs. Ray Michie: When is the Scottish Grand Committee likely to resume its sittings? I hope that we can have an early debate either through that forum or on the Floor of the House about Scottish fish farming. The problems affecting that industry are being exacerbated by Norwegian dumping on the European Community which will be made worse if the reports that the United States will impose a levy on Norwegian farmed fish are true. My fish farming constituents believe that the Government do not know what they are doing or how to tackle the problem and I should welcome a debate on the matter.

Mr. MacGregor: I am aware of the issues facing the fish farming industry, in which, as the hon. Lady may know, I have taken and will continue to take a close interest. Indeed, I was discussing some of those matters in Perth last night.

Mrs. Michie: In Perth?

Mr. MacGregor: Yes. I do not know why the hon. Lady is so surprised—it seems to me to be an appropriate place to discuss such matters, with people who are experts in them. As regards how the matter is raised in the House, the hon. Lady will have ways to raise it, but, if she will allow me, I shall look into the matter and reflect on it.

Mrs. Teresa Gorman: In view of the amount of public disquiet expressed in the media and in all the pubs in my constituency about the level of public support given to people who borrow inordinately large amounts of money on mortgage and cannot repay them, may we have an early debate in this House on the subject, not because we object to helping such people, but because my constituents feel that the burden of those bad judgments in overlending should be borne equally by the lenders of those very large sums?

Mr. MacGregor: My hon. Friend may be referring to a specific case that has received much publicity. The rules on help with mortgage interest are applied even-handedly to all owner-occupiers who suddenly become unemployed. In that case I think that there was some reference to a second home. No help is given with outgoings on a second home, and the possession of a second property will preclude entitlement to income support if its value, less any debts secured on it, exceeds £8,000. My hon. Friend may wish to know that the chief adjudication officer is taking legal advice on some aspects of the commissioner's decision to allow full payment of mortgage interest in one recent case.

Mr. Tom Clarke: Is the Leader of the House aware of the great concern in colleges of education in Scotland about the Secretary of State's proposal, in his poll tax announcement, to take them out of the ambit of local government? Today, I received a letter from the principal of Coatbridge college—he is also secretary of the Strathclyde Principals Association—and from the chairman of the council at Coatbridge college expressing grave anxieties about administrative and other difficulties that would arise. Since that college serves Lanarkshire, including the village of Shotts which I gather


is dear to the right hon. Gentleman's heart, will he agree that those well-informed views on education should not be dismissed lightly?

Mr. MacGregor: I hesitate to say this, but I referred to Shotts in Perth last night as well—it was obviously a long night. When I was Secretary of State for Education and Science I was certainly enthusiastic to work towards what we have announced—further education colleges coming outside local authority control in England. I know that that has been widely welcomed by many colleges in England and it is a desirable policy development. As regards the administrative problems of a college in Scotland that the hon. Gentleman mentioned, I shall draw them to the attention of my right hon. Friend the Secretary of State for Scotland.

Dr. Norman A. Godman: May I impress on the Leader of the House the need for an early debate either in the Chamber or in the Scottish Grand Committee on the worrying subject of the present circumstances of child care law in Scotland, especially when we compare the present state of the law with English legislation? The right hon. Gentleman well knows that there was a time when Scots law was well in advance of English law in the protection of children. I refer to the Social Work (Scotland) Act, 1968. Today, children in Scotland are discriminated against, compared with the protection that is given, rightly and properly, to children here in England. There is no Children (Scotland) Act similar to match that in England. Under the provisions of the Criminal Justice Bill, children caught up in sexual and child abuse cases in England will rightly be spared the ordeal of giving evidence in court but a few feet away from the accused. We do not have that type of legislation in Scotland. We ought to have it and we need that debate.

Mr. MacGregor: The hon. Gentleman will appreciate that it is not possible for me to comment on a particular child abuse case in Scotland which is sub judice, but my right hon. Friend has announced that when that matter is completed, there will be an inquiry into this whole area. I am not sure that it would be appropriate to find Government time for a debate on the matter in the near future. It is important that the inquiry should take place. The hon. Gentleman will be able to raise issues that concern him—and I fully agree with him that these are important matters—in other ways in the House.

Rev. Martin Smyth: When might we have an opportunity to debate the proposed European extradition treaty—or does that come in the general van of the House not knowing until things are finished—so that hon. Members might express their views on the Republic of Ireland constantly seeking favoured-nation status with us while being unwilling to sign a treaty of extradition, when this nation suffers most because of that failure?

Mr. MacGregor: I am sure that the Secretary of State for Northern Ireland has made clear the Government's position on those matters. I cannot promise a debate on them in the near future.

Mr. Ron Brown: The Government are not even handed about certain matters. As a Scot, the right hon. Gentleman will appreciate that north of the

border a different law operates on the poll tax, which is how the struggle started. Nobody can be gaoled there, although in England 16 people have been hounded and imprisoned by the Government under the laws of England. We need a debate to see whether we can be more even handed on the issue. It seems clear that there should be an amnesty. Can we discuss the matter next week? It is important that we do that, because the people outside are demanding it, and they are the people who matter. People power matters.

Mr. MacGregor: The people outside, as the hon. Gentleman puts it, in England—I am sure that the same applies in Scotland—feel strongly when they pay their community charge and find that others, sometimes on higher incomes than themselves, do not. There is very strong feeling indeed in the country about that. People feel that those who do not make their payments should be properly pursued in the normal way.

Ms. Marjorie Mowlam: Will the Leader of the House allocate time for a debate on the practice of the HFC bank in selling insurance-linked loans? Revelations in the Daily Mirror have recently shown how many people have been misled in a cold and calculating way. One couple who had a loan of £5,000 were misled into taking out an insurance policy and now have a loan of £14,000. They are not alone in that experience. People who have worked for the bank have complained. It is essential that we debate the matter so that the Minister has an opportunity to explain what will be done by the regulatory bodies about such scandals.

Mr. MacGregor: I did not see the newspaper report to which the hon. Member referred, so I cannot comment on it. I cannot find Government time for those matters to be discussed in the near future, but there are other ways in which they can be raised in the House.

Mr. Tam Dalyell: Regarding Tuesday's business, since fortunately, but deservedly, I have the Adjournment debate on the subject of the Kuwaiti oilfields, may I ask the right hon. Gentleman to say who will answer my debate? Will it be the Foreign Office, which must conduct relations with paralysed Kuwait; will it be the Department of the Environment, in view of the fact that the effects now stretch to the Himalayas, west China, Quetta and Baluchistan; will it be the Department of Energy, with its oil well responsibilities; will it be the Department of Trade and Industry, which is responsible for contracts; or will it be the Ministry of Defence, whose sappers are trying their best in the most difficult conditions to fight the oilwell fires? Whoever answers, will the Leader of the House arrange for a formal statement to be forthcoming from the chief medical officer, Sir Donald Acheson, giving the Government's views on the carcinogenic or other effects of what is happening to those who are trying to put out the dreadful fires?

Mr. Speaker: Order. The hon. Member should not go into the subject of his Adjournment debate. He may ask which Minister will reply.

Mr. Dalyell: Can I not use this opportunity to ask for a formal statement of the Government's view? If not, the issue will be evaded.

Mr. Speaker: Order. This is about business next week. I thought that the hon. Gentleman was asking who will answer the debate.

Mr. Dalyell: Yes, but perhaps we could have a statement from the Department that will not be answering it—the Department of Health—because part of the debate is a serious statement on the considered, non-political, governmental view of the medical authorities on the cancer risks that our people, as well as the indigenous populations, face in an increasingly appalling situation.

Mr. MacGregor: I am not yet sure who will answer the hon. Gentleman's Adjournment debate. It will not be all five Departments, but I shall let him know which one it is as soon as I can find out. I am grateful to the hon. Gentleman for his usual courtesy in indicating the subject that he will raise and I shall draw it to the attention of the Minister who will reply.

Mr. William O'Brien: Will the Leader of the House allow time next week to discuss a serious matter that has arisen because of the policy directive that Yorkshire regional health authority has issued to GPs? It has told GPs that if they refer patients to a hospital that is not contracted to the local health authority there could be delays in that patient's treatment, but that if a patient is referred from a funded practice there will be no delay. It is a two-tier system and, until someone decides who will pay the cash for the patient who will be under the practice contracted by the health authority, there will be tremendous problems. Will the Leader of the House allow time for this two-tier system in the health service to be discussed so that we can resolve the matter?

Mr. MacGregor: We do not have a two-tier system and the matter can be raised if the hon. Gentleman catches your eye, Mr. Speaker, in the debate on Tuesday.

Mr. Dave Nellist: Does the Leader of the House agree that there is now an urgent need for a debate on the defence industry in general and the aerospace industry in particular? The huge number of redundancies that have already been announced this year were disgracefully augmented yesterday by the axing of 3,000 jobs by Rolls-Royce, not least in Leavesden. If the Leader of the House could find time to organise such a debate, it would allow a contrast to be made between the chaotic way in which defence jobs are being run down—often losing highly skilled men and women who have worked for the same company for 20, 30 or 40 years—and the need for those companies to diversify into socially useful products. If the companies will not do it, why will not the Government offer some direction from the Ministry of Defence or the Department of Trade and Industry? If they will not do so in the private sector, the industry should be brought back into the public sector so that the jobs of those skilled defence workers can be guaranteed.

Mr. MacGregor: This is the first time that I have heard the hon. Gentleman argue for higher defence expenditure. He has always moved in a different way.

Mr. Nellist: I was talking about diversification.

Mr. MacGregor: I know, but the hon. Gentleman was also complaining about the loss of jobs because of the lack of defence expenditure. He tries to have it both ways. As he knows, we have debates on defence matters. There will be two more in this Session and the defence aspects could be raised then.

Points of Order

Mr. Speaker: A point of order, I think—Mr. Howarth.

Mr. Gerald Howarth: I am grateful to you, Mr. Speaker, for reading my mind.

Mr. Tony Banks: It did not take long.

Mr. Howarth: I remind you, Mr. Speaker, that I and other Conservative Members have waited patiently for 53 minutes to raise our points of order. We did not seek to press you at the beginning of business questions because I understand that, during Agriculture questions, the hon. Member for Bradford, South (Mr. Cryer) raised a point of order——

Mr. Speaker: Order. Let me just clear that up, because the hon. Member for Langbaurgh (Mr. Holt) blew his top about it. It is perfectly legitimate for an hon. Member who disagrees with the answer to his question to say that he will seek to raise the matter on the Adjournment if the question on the Order Paper is his own. That is exactly what happened. I stopped another hon. Member, who said that he would raise the matter on the Adjournment because his point of order was on a supplementary question, which is quite a different matter.

Mr. Howarth: I am most grateful that the precedent has been set that points of order may be raised now.
As I think that you, Mr. Speaker, will anticipate, my point of order relates to the disgraceful behaviour that occurred yesterday afternoon during the Division on the Asylum Seekers and Refugees Bill—a ten-minute Bill promoted by the hon. Member for Islington, North (Mr. Corbyn). I do not know whether you have had a chance to read the exchanges, which are recorded in Hansard, in columns 749 and 750.
I was telling for the Ayes, and the hon. Member for Coventry, South-East, (Mr. Nellist), who is in his place, was behaving in the customary menacing and contemptible manner which he frequently displays in the House. It is clear that, yesterday afternoon, some of my hon. Friends might have voted against the measure had it not been for the menacing and thuggish remarks of the hon. Member for Coventry, South-East, whose complete lack of a sense of humour is well known to the House. He was behaving in a thoroughly intimidating fashion.

Mr. Speaker: What is the point of order for me, though?

Mr. Howarth: The point of order for you, Mr. Speaker, is that Mr. Deputy Speaker, while deprecating what took place, took no effective action——

Mr. Speaker: Order. Let me deal with this. I have received a report of the incident, and I wholly support what Mr. Deputy Speaker said about this yesterday. He said that such conduct was strongly to be deprecated. He established that there had been no physical obstruction of hon. Members, and the Division was able to proceed without interruption. The Chair has no power to require the withdrawal of words spoken outside the Chamber, and

furthermore nothing that occurs on one day may be dealt with by the Chair under disciplinary powers on a subsequent occasion.
Following Mr. Deputy Speaker's strong condemnation of yesterday's incident, I hope that the matter can rest there. I do, however, absolutely deprecate language and words of the sort used yesterday, which would have been dealt with strongly if they had been made in the Chamber.

Mr. Howarth: Further to that point of order, Mr. Speaker. I am grateful for what you have said, but the point about the behaviour of the hon. Member for Coventry, South-East relates not so much to what he said—which was his usual fatuous nonsense—but the manner in which he said it. The Serjeant at Arms is present, armed with his sword, to deal with thugs and villains like that.

Several Hon. Members: On a point of order, Mr. Speaker.

Mr. Speaker: Order. I do not think that swords are called for. I call the Father of the House.

Sir Bernard Braine: I rise with some reluctance because I do not like criticising any hon. Member, from whichever party.
My hon. Friend the Member for Cannock and Burntwood (Mr. Howarth) has raised a point of great substance—yesterday, an attempt was made to ventilate it. I understand perfectly, and entirely agree with you, Mr. Speaker, that no criticism can be made of the Chair. Mr. Deputy Speaker, by virtue of being locked in the Chair, cannot be cognisant of what happens outside the Chamber, and I could not quarrel with one word that he said. However, the fact remains that that little area between the doors——

Mr. Bob Cryer: There was nothing as vicious as during the abortion law debates which the right hon. Gentleman led.

Sir Bernard Braine: My point is of far greater importance than anything that the hon. Member for Bradford, South (Mr. Cryer) has raised, either today or any other day—it goes to the heart of the liberties and rights of the House.
That little area and the two Division Lobbies are an integral part of the decision-making process for which the House exists. What happened yesterday was disgraceful.
I do not wish to repeat in detail what I said yesterday, but in my 40 years in the House I have never witnessed any behaviour like it. The behaviour of the hon. Member for Coventry, South-East (Mr. Nellist) was intimidating and offensive. He barred the way to certain hon. Members who were trying to get into the Lobby. Indeed, it alarmed some hon. Members, who turned away. If such behaviour had taken place in the Chamber, it would have resulted in Mr. Deputy Speaker disciplining the hon. Member straight away.
This is a serious problem. Mr. Deputy Speaker could not be cognisant of what had happened. I am supporting my hon. Friend because abuse of privilege outside the House is rightly taken seriously by all hon. Members. But abuse of the voting procedure of the House is far worse. Behaviour of that kind cannot be tolerated.
I shall not pursue the matter further now, but I hope that you will consider it, Mr. Speaker, and see what


restraints can he put upon such behaviour, either by the hon. Member for Coventry, South-East or by any other hon. Member.

Several Hon. Members: Further to the point of order, Mr. Speaker——

Mr. Speaker: Order. We have a very busy day ahead of us. May I say to the Father of the House and to the whole House that I entirely accept what he said; such behaviour is unacceptable. The Deputy Speaker who was in the Chair at the time sent to find out if there had been obstruction, and it was reported to him that there was no obstruction. Therefore, there was nothing that he could do about a matter that had taken place outside the Chamber. In order to clear the matter up, the hon. Member who was concerned is present in the Chamber, and if he would like to give an explanation, we could get on with the next business.

Mr. Dennis Skinner: rose——

Mr. Speaker: I understand that the hon. Member for Bolsover (Mr. Skinner) was present. Let us hear what he has to say about it.

Mr. Skinner: And I was present on the previous day when there was a vote on a ten-minute Bill, and I heard someone shouting, "Vote this way for porn videos." It was not exactly that. I have been around many times when I have seen Tory Whips shoving hon. Members into the Lobby to vote when they have not wanted to. What happened yesterday was that my hon. Friend the Member for Coventry. South-East (Mr. Nellist) saw some Tory Members who were goose-stepping on their way into the Lobby. He thought that he would make a few apposite remarks because they were anxious to vote against the measure. The hon. Member for Cannock and Burntwood (Mr. Howarth) has been referred to many times in the House as a Member of the goose-stepping tendency—and saying that is not prevented by "Erskine May".
The truth is, as you know, Mr. Speaker, that on many occasions there has been a little bother beyond that line. I remember, as I am sure you do, when Tom Swain got hold of the neck of the right hon. Member for Chingford (Mr. Tebbit). Some people asked, "What is going on?" Hansard could only say that it was an altercation. He nearly throttled him. Someone said, "Somebody had better stop him." The deputy Chief Whip at the time, who is not a million miles away from the Chair, had to go and sort them out. But it did not get in Hansard, and I did not hear any Tory Members raising a fuss about it. The right hon. Member for Chingford had to send a letter of apology to my hon. Friend.

Several Hon. Members: rose——

Mr. Speaker: Order. The hon. Gentleman reminds me of things that I have witnessed in the Division Lobbies. I am bound to say that I have heard some rough things said in the Division Lobbies. Let us leave it now. The whole House knows that we should behave with decorum. Comments made outside the Chamber, which are clearly designed to raise the temperature, which, I have to say bluntly to the hon. Member, are offensive, and which would be dealt with strongly if said inside the Chamber, are to be deprecated. I think that we should move on.

Mr. D. N. Campbell-Savours: On a point of order, Mr. Speaker, on another matter. I am sure that you will have seen a number of reports in the Today newspaper this week that are causing concern to hon. Members. You have always sought to protect the reputation of the House.
In one article on Tuesday Today said:
the evidence confirms that Britain's MPs are the laziest in Europe.
It goes on to say:
Britain's lazy MPs are to award themselves a Summer holiday which could last up to four months.
You know that that is not true, Mr. Speaker. We do not award ourselves holidays; we have a recess, and during it some of us manage to eke out perhaps one or two weeks' holiday, but the great majority of hon. Members are hard at work in their constituencies.
More importantly, the editorial in Today states:
Televising parliament allows us to see that apart from Prime Minister's question time, the chamber is usually at least nine tenths empty. Do the Hon. Members honestly expect us to believe the rest of them are all working away busily?
No reference is made to Select Committees or Standing Committees, both of which are heavily attended by Members and deal with legislation. No reference is made to Back-Bench groups, the meetings of which are heavily attended. Nor does the newspaper refer to policy meetings of all the parties in the House or to meetings with Ministers, constituents and other Members. We are within an hour and a half of a meeting, which will be well attended, with a delegation of Commonwealth parliamentarians who are in the House. The record must be set straight, and the British people should be given some indication from the Chair about what is happening.
Under a headline which asks:
So just how hard does your M P work for you?",
there is a list of more than 600 Members and their voting records. It is significant that, at the bottom of the list, is a Scottish Member who has had a lung transplant. A little further up the list is the name of a Liverpool Member who is deeply ill, an illness that is of concern to many hon. Members. Further up the list there is a reference to Mr. Norman Buchan, who was a close friend of many hon. Members and who died quite a long time ago. Somehow his name is included in the list in the context of his voting effort, but clearly he was not in a position to vote in the House.
The bottom of the list refers to Ministers, who are often in different parts of the country carrying out their public duties, and to Front-Bench members of my party, who can be in all parts of the country carrying out engagements. The first 100 names contain a heavy concentration of Conservative Members but, of course, we all know—there is nothing wrong about it—that the Government have to maintain a majority in the House and Conservative Members are detained here.
That list is supposed to be an indication of the effort made by hon. Members in carrying out their public duties. The article is clearly a disgrace. It is a misrepresentation of what happens in Parliament. Although Mr. John Craig is a good friend to many hon. Members, if pressure was exerted upon him by his editors to write the article, he should at least protest and perhaps indicate his protest to Parliament as a whole. Let us express the hope, as I do on behalf of my hon. Friends, that Today will be wise enough to print an apology for this gross misrepresentation of the democratic process in the United Kingdom.

Several Hon. Members: rose——

Mr. Speaker: Order. I have allowed the hon. Member for Workington (Mr. Campbell-Savours) to make his point of order at some length, because it is important that the truth about Members of Parliament and their work load in this place should be known to the public. This country has a free press and there is no way in which any of us would seek to muzzle it. As the guardian of the reputation of the House of Commons and its Members, I deprecate what has been said. The hon. Member for Edinburgh, Leith (Mr. Brown), who is present in the Chamber——

Mr. Ron Brown: rose——

Mr. Speaker: Do not get up yet, please.
In a debate which I well remember about a year ago, the hon. Gentleman said, if I may paraphrase him, that one could sum up some of the modern press in three short phrases—"Make it brief, make it juicy, make it up."

Mr. James Couchman: Further to that point of order, Mr. Speaker. I do not have the advantage of having the article in question to hand, but I did read it carefully yesterday, and I should like to endorse everything that the hon. Member for Workington (Mr. Campbell-Savours) has said. The article was run under a headline that suggested that we have voted ourselves a four-month break during the summer, and it went on to question the work load of hon. Members. Perhaps we should be interested in the work load of members of the Press Gallery, but that might be mischievous. Just because this House does not sit in the summer months does not mean that our duties end there. I have no doubt that the person who wrote the article would be the first when in trouble to get in touch with his Member of Parliament—if necessary at midnight on Christmas day—to solve his problem.

Mr. David Winnick: On the same point of order, Mr. Speaker. Would you agree that the House of Commons should not be immune from criticism, and that journalists have as much right as anyone else to criticise us? It would be most unfortunate if we ever did anything to stop people criticising us. But is there not an important distinction between informed and uninformed criticism? I am sure that we all disapprove of the sort of trashy criticism that brings the House into disrepute.
Tabloid newspapers are read by a large number of people, and if some people look on the House of Commons with contempt as a result—I hope that they do not—does not that undermine our democratic liberties? This House is the custodian of the democratic liberties of our people, and to the extent that it is brought into disrepute by valueless criticism of this sort, that is unfortunate, to say the least.
It might be useful if we compared the working hours of most Members of Parliament with the working hours of the journalists who have written some of this trashy criticism.

Mr. Peter Bottomley: Further to that point of order——

Mr. Speaker: Is it the same point of order?

Mr. Bottomley: Yes, Sir.
The right point to emphasise is the use of information. When an article clearly contains glaring errors and

insulting remarks, as described by the hon. Member for Workington (Mr. Campbell-Savours), it should be exposed in public, but we should be careful about trying to remove from newspapers their right to be wrong. It is important that we have a free press and that, when newspapers are wrong, people should be able to raise the matter.
That should be the end of it, except for one suggestion that may be outside the rules of the House. Perhaps one of the cameras could be turned for one minute every hour on the Press Gallery, and the resulting photographs printed and made available to Members of Parliament and to the editors in charge of those who report our proceedings.

Dr. Norman A. Godman: On a point of order, Mr. Speaker——

Mr. Speaker: Is it the same point of order?

Dr. Godman: Yes, Sir. I am grateful for your response to my hon. Friend the Member for Workington (Mr. Campbell-Savours). Do you agree that, at the very least, the editor of the relevant newspaper should send his profuse apologise to Mrs. Janey Buchan, the widow of our late and dear friend, Norman Buchan?

Mr. Bob Cryer: Further to that point of order, Mr. Speaker. I do not defend the inaccuracies in the article, but you may recall that, at one time, the attendance and voting records of Members were published every year in an independent publication, which gave a much better idea of our work load because it covered oral and written questions tabled by Members as well. Do you agree that, although we can criticise inaccuracies, a number of Members of this House do not exactly shed lustre on our proceedings when we are criticised in respect of attendance by holding so many outside interests, many of which they acquired when they came here——

Mr. Speaker: Order. That is widening the point of order; we do not want to debate that now.

Mr. Tony Marlow: rose——

Mr. Ron Brown: rose——

Mr. Speaker: Order. I have mentioned the hon. Member for Edinburgh, Leith, but I call Mr. Marlow first.

Mr. Marlow: I do not think that we should be over-sensitive or over-precious about this. One of the roles of this House is to seek to sustain the interests of the people of this country, and from time to time we have to take on vested interests and lobbies. So it is not very pleasant if we are seen as being lobbyists on our own behalf, as we seem to be at the moment.
It is certainly true that many hon. Members work as hard and are as dedicated as anyone in the country, but that is not true of everyone in the House. It is fair and proper that the press should criticise. Sometimes that criticism is not as impartial as we should like it to be, but the press is free, and long may it remain so. Let us not be too precious about it.

Several Hon. Members: rose——

Mr. Speaker: Finally, Mr. Ron Brown.

Mr. Ron Brown: Further to that point of order, Mr. Speaker. Your paraphrasing of my statement showed what all of us feel—that the press should not make up a story.
We are of course open to criticism. It annoys me, however, that a certain tabloid, the Daily Record and the Edinburgh Evening News, recently made up a story that I had forged signatures on an early-day motion. That goes on all the time, even though no such criticisms about me or anyone else have come to your notice. Have I to your knowledge, Mr. Speaker, forged signatures on early-day motions about any issue, sensational or otherwise?

Mr. Speaker: I am certain that that is quite untrue.

Several Hon. Members: rose——

Mr. Speaker: Order. I will take one question from Northern Ireland since we have not yet had a comment from there; then we must move on.

Rev. Martin Smyth: I appreciate being called, Mr. Speaker, although I was trying to catch your eye before this matter was raised, but what I have to say is linked with the earlier issue.
I support those who defend the right of the press to be free, but the press should give the whole facts. For example, some of us have abstained in person in votes because we were not prepared to vote for or against some motion, so the voting record has distorted what goes on here.
I regret that the Leader of the House is no longer present but I seek guidance from you, Mr. Speaker, following the right hon. Gentleman's response to my question about the extradition treaty in Europe. He said that the Secretary of State for Northern Ireland would explain the Government's position to us. I was actually asking for a statement in the House so that the House would be given responsibility. We learned about this from the Daily Mail yesterday—that is why I said that this was an associated matter; sometimes the media inform us about things that Ministers do not tell us about in the House—and I am not aware that the Secretary of State for

Northern Ireland is responsible for dealing with extradition in Europe. The Minister responsible should come to the House so that we can debate the matter with informed minds.

Mr. Speaker: I am sure that those on the Government Front Bench will have heard that.
I have allowed this matter to go on for some time because it is important that the public know the facts about the House of Commons—the fact that Standing Committees meet at 10.30 in the morning, so we do not sit only in the afternoons; the fact that there are Select Committees, so that the work of Members of Parliament does not go on only in the Chamber; and there is constituency work as well.
We all agree that we must have a free press in this country; we also want a responsible press. What has upset a number of parliamentary colleagues today is the fact that some hon. Members, for reasons that they could not help—in one case, a death and in others, illness—were mentioned adversely in a newspaper report. That draws attention to the fact that journalists should do their homework just as we do.

Royal Assent

Mr. Speaker: I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified her Royal Assent to the following Acts:
Consolidated Fund (No. 2) Act 1991
Representation of the People Act 1991
Civil Jurisdiction and Judgments Act 1991
Tay Road Bridge Order Confirmation Act 1991
Shard Bridge Act 1991
Adelphi Estate Act 1991
Heathrow Express Railway Act 1991.

Act passed in accordance with the provisions of the Parliament Acts 1911 and 1949: War Crimes Act 1991.

Orders of the Day — Social Security (Contributions) Bill

Order for Second Reading read.

The Minister for Social Security and Disabled People (Mr. Nicholas Scott): I beg to move, That the Bill be now read a Second time.
The purpose of the Bill is to fill what I believe to be an important gap in the national insurance contributions system as a result of which employers do not pay contributions to the national insurance fund if they pay their employees in cars rather than in cash. As hon. Members will know, the fund is used to finance a wide range of contributory benefits, including retirement pensions and widows' benefits. Its income is generated by levying contributions on employees and their employers and on the self-employed. Under the present law, employers are required to pay contributions on the earnings of all their employees if they are above the lower limit, but earnings are defined in such a way as to exclude payments in kind. This exclusion dates from a time when such payments represented only a very small proportion of people's earnings.

Mr. Tony Marlow: My right hon. Friend, very interestingly, has indicated that the national insurance fund is a specific bucket of money to be spent in various areas of Government policy. We are aware of proposals that employees' contributions should go right up the range. If that were to happen, would not national insurance become exactly the same as income tax? It is suggested, in addition, that some people should have to pay 10 per cent. extra in income tax. That, together with the payment of 9 per cent. right up the range, would mean that the managers of the country would be faced with a marginal tax rate increase of about 50 per cent. In those circumstances, as night follows day, every handbag and wallet in the country would be mugged by people seeking this extra money.

Mr. Deputy Speaker (Sir Paul Dean): I am sure the Minister recognises that this is a comparatively narrow Bill and that we cannot debate the whole range of things that have just been raised.

Mr. Scott: I certainly accept your judgment, Mr. Deputy Speaker. I would not, in any case, have responded in detail to my hon. Friend, although I understand his impatience and his inclination to draw attention to some of the nonsense being suggested by the Opposition in the run-up to the election. In due course, there will be opportunities to tackle these matters.
The situation that the Bill seeks to address dates from a time when payments in kind of this sort represented only a very small proportion of people's earnings. They were generally made on an irregular and infrequent basis and often consisted of goods that were difficult, if not impossible, to value accurately. The situation today is very different. A large number of employers choose to offer their employees a total package of remuneration, which includes substantial non-cash items.
The commonest and largest such item is the company car. One has only to look at the advertisements in the appointments sections of the national newspapers to see how common that is these days. We estimate that, this year, more than 2 million employees will receive, as part of the remuneration package, the benefit of having a company car. This represents a doubling of the number of company cars since 1985–86. Company cars have become a normal and accepted part of people's earnings. I cannot believe, in those circumstances, that it is right that this form of payment should lie outside the national insurance system. Perhaps I may advance an additional, tangential argument by saying that nor can it be right, given the impact of motoring on the environment, that there should, in a sense, be a built-in encouragement for people to be paid in terms of cars rather than cash.

Sir Geoffrey Finsberg: My right hon. Friend said that one purpose of the national insurance fund is to make provision for such benefits as retirement pensions. If employers are now to pay national insurance contributions in respect of staff motor cars, will the employees get some additional state benefits by way of extra pension?

Mr. Scott: That is certainly not the case. There are certain demands on the national insurance fund. A certain percentage is guaranteed to the national health service. The fund also pays for other contributory benefits. Obviously we, as well as the Government Actuary, monitor the state of the fund, but there is no essential link between the benefits that are paid and the contributions that are received. From year to year, a judgment is made as to contributions and payments. There is no automaticity.

Mr. Roger King: My right hon. Friend has mentioned the number of cars provided by companies for the use of their employees. Does he agree that a vast number of those employees simply must have a company car? I think, for instance, of electricians, washing machine servicers and representatives of confectionery companies. If such a person has a car, it is not part of his remuneration package. The car is needed as a tool of the trade, just as a secretary needs a word processor or a telephone. Surely it is unrealistic to suggest that employers should be especially burdened in this way for providing their employees with the tools to do the job for which they are paid.

Mr. Scott: I shall respond briefly to my hon. Friend, but will give more detail later in my speech. There is a range of provision for company cars. Some cars are, in effect, a perk; some are essentially a tool of the trade, in the sense that they are necessary to the job; in the middle, there is a mixture of business and private use, which varies very considerably. I hope that later I shall be able to satisfy hon. Members that the changes that we are making reflect those different uses. If a motor vehicle of one sort or another is used entirely for business purposes it will be outside the scope of this legislation. My hon. Friend referred to such vehicles as being tools of the trade, but where a vehicle is used to a significant extent for private purposes, a halved-scale rate payment will be expected to comply with these provisions. Any vehicle that is used entirely for business purposes will not be covered.

Mr. James Couchman: Will the Exchequer make such national insurance contributions in respect of the private use made of ministerial cars—for example, on journeys between home and place of work?

Mr. Scott: Ministerial cars, and, indeed, cars used by some other hon. and right hon. Members, are provided from a Government pool as required. They are not allocated to individuals.

Mr. Couchman: Ah!

Mr. Scott: Having been a Parliamentary Private Secretary, my hon. Friend will know that there are very strict rules about the use to which ministerial vehicles may be put.

Mr. Frank Haynes: Another story for the Today newspaper.

Mr. Scott: They are no different from the rules applied by Governments of all parties since the war.

Dr. Norman A. Godman: I thank the Minister for his characteristic courtesy in giving way.
Can he confirm that the implementation of this legislation will not result in an extra workload on the staff in Department of Social Security offices? In Greenock and Port Glasgow, there is great concern about the slowness with which local offices deal with claims—in particular, claims for backdated benefits. I assure the Minister that this matter concerns people in my constituency.

Mr. Scott: If I may turn the tables on the hon. Gentleman, I should say that I admire his characteristic ingenuity. There is a total distinction between the new Benefits Agency, which I expect to improve the delivery of services to the constituents of all hon. Members, and the Contributions Agency, which will be responsible for the collection of national insurance contributions. There again, my right hon. Friend and my colleagues in the Department expect to see improved performance in the collection of national insurance contributions from employers, the self-employed and so on in coming years. So there will certainly be no impact at all on the service, which we aim to improve, in the local offices of the Benefits Agency.
Returning to my main theme, I do not believe that it is right that the rules should continue to operate in such a way that employers find it financially more attractive to pay their employees with cars rather than with cash. The Bill that I am urging the House to support today aims to correct this imbalance in our present legislation by requiring employers to pay national insurance contributions on cars and free fuel.
Individual employees who are provided with company cars and fuel are at present required to pay income tax on the benefit which they derive from free private motoring. The value of this benefit is assessed using a set of scale charges devised by the Inland Revenue to reflect the costs of owning and running a motor vehicle. We propose that the same scale charge rules shall be used to determine an employer's contribution liability. As with the Inland Revenue scheme, employers will face no contribution payments if a company car is provided purely for business purposes and there is no private mileage. Similarly, there will be reductions in contribution liability where business mileage is high. I believe that to be right. It is a way of

recognising, within this pattern of provision, that for some employees a car is essential to the performance of their duties, whereas for others—those who do very little business travel—the car is provided solely or largely for the employees' private use.
As the House will know, there is a liability on both employers and employees to pay class 1 contributions. Nevertheless, we have decided—I hope that I can carry the House with me on this—that employees will not be liable to pay contributions in respect of company cars and free fuel. They already pay tax on that use.
There is a variety of practical reasons why we have decided not to impose national insurance contributions on those people. First, more than half all employees who have a company car are above the upper earnings limit for contributions. Secondly, employees are already required to pay tax and the imbalance in the tax and contributions rules for them is not so manifest as it is for employers. Finally, the rules for assessing primary contributions make it very difficult to integrate the new system with the existing national insurance contribution arrangements so as to produce a workable system for collecting the new contributions from employees. We believe that the additional complications for employers would be out of all proportion to the extra revenue raised and we therefore intend that employees should be excluded from any new liability.
I turn now to the practical arrangements that we intend to make for the collection of the new contributions. In devising these arrangements we have paid careful attention to the need to produce a scheme which employers can operate with the minimum of extra work. We have therefore decided to stick very closely to existing Inland Revenue rules with which employers are already familiar. Accordingly, the Bill will impose a contribution liability in respect of those employees provided with cars only where a scale charge would apply for tax purposes. Broadly speaking, these are company directors and employees earning more than £8,500 a year, including benefits in kind. The substantial advantage of this approach is that employers are already required to report annually to the Inland Revenue the details of such cars and we see no reason why they should face any particular difficulty in combining that reporting process with the assessment of contribution liability under the terms of this Bill.
The annual reporting takes place at the end of each tax year and forms detailing the cars and petrol provided during the previous year have to be sent to the Inland Revenue by 19 June. Under our proposals employers will use the same information, together with guidance which my Department will provide, to assess their contribution liability. The sums due can then be paid to the Inland Revenue as part of the normal PAYE national insurance return. The only other task employers will have to undertake is the inclusion of the contributions paid, in the normal way, in their wages records and end-of-year documentation.
The Bill will enable us to make regulations to determine those arrangements. However, before drafting the regulations, laying them before the House and setting out the practical arrangements for collection, we have invited employers' representatives to comment on the scheme that we have in mind. We will listen very carefully to their views and take them into account before settling the final details. We have time to do that because, although the Bill


introduces the new contributions from the beginning of the present tax year, they will not be assessed or collected until 1992–93—in essence, in June 1992.
I know that some employers have expressed to us and in the press, to some extent, concern about the need for additional record-keeping. I do not believe that such concern is well founded. As I have explained, details of company cars already have to be provided to the Inland Revenue each year. Only a small amount of additional information will be needed to calculate the appropriate contribution charge. If, for example, the employer intends to claim one of the discounts for high mileage, he will have to satisfy himself that the car was used for more than 2,500 or more than 18,000 business miles during the course of the year. I do not believe that that will represent an insuperable problem.
We believe that in the majority of cases the information will already be available from the employers' records. First, it will be generally clear from the nature of the employee's job whether a discount for business use over 2,500 or 18,000 miles a year is appropriate. Secondly, the employer will be able to check details of business mileage with his employees. Finally, since the employer will be meeting the costs of petrol used for business mileage and may be keeping records for VAT purposes, further information will be available. So I do not believe that this will put any substantial extra burden on employers. There will be no requirement to maintain comprehensive business mileage records in every case and, generally speaking, we shall be adopting precisely the same approach to this as the Inland Revenue does at the moment in assessing individual liability; and after consulting employers, we shall be providing them with detailed guidance about what information will be required to comply with the requirements of the system.
To ensure that the system is operated correctly, we shall not be giving discounts to employers who at the time that the contributions are due do not know, or cannot say, which business mileage band is appropriate. I believe that that is a sensible protection for the fund. Subsequent adjustments will be possible if the wrong, or insufficient, information was used in the first calculation. In the event of disputes, employers will have access to the existing departmental machinery which at present determines the outcome of contribution problems.

Sir Geoffrey Finsberg: Is my right hon. Friend saying that any disputes should be settled by the Department of Social Security and not by the Inland Revenue? If the details have to go to the Inland Revenue, can he assure us that disputes will be dealt with by the excellent set-up in his Department?

Mr. Scott: My hon. Friend is, of course, very familiar with that system, and we will use exactly the same machinery as we use at the moment to settle contributions disputes.
In essence, we are looking to have here a system of self-assessment, with checks undertaken, in the normal way, by national insurance inspectors, who will obviously want to be sure that employers understand and operate the rules correctly.

Mr. Tim Smith: Before my right hon. Friend continues, I want to ask him about the payments.
Is not it the case that most national insurance contributions at the moment are collected monthly with PAYE? How much is collected after the end of the national insurance year at the moment, because, as I understand it, in June 1992, £550 million will be due in one lump sum from employers and there are no interest penalties for late payment? How will the Department ensure that the money is paid over on time?

Mr. Scott: Under the Inland Revenue scheme, the money has to be paid by 19 June following the end of the tax year. Those would be our arrangements for any money that had not been paid in the course of ordinary monthly payments. Anything outstanding would have to be paid by 19 June following the end of the tax year. We shall follow the existing arrangements closely. It must be for the convenience of employers that, in establishing the contribution rules, we follow the Inland Revenue as closely as possible. Employers who are familiar with what happens with the Inland Revenue can lock easily into our provisions for national insurance contributions.
I turn now to the individual provisions of the Bill. Clause 1 amends existing legislation and specifies the circumstances in which the new contributions are payable and who will be liable to pay them. It also defines the amount on which the contributions will be calculated and the percentage rate at which they will be charged.
Subsections (1) to (4) introduce the new contribution which is to be called "class 1A". The provisions of subsection (5) form the basis of how the contributions will be calculated and who should pay them. The value of employer-provided cars and fuel will be determined, as I explained earlier, by reference to the income tax rules given in sections 157 and 158 and in schedule 6 of the Income and Corporation Taxes Act 1988.
The liability for the new contribution will arise where an amount is chargeable under tax rules for the employment in question and where that employment is employment for which national insurance contributions would be due. The effect of that is to exclude from the new contributions any employee earning less than £8,500 a year, including benefits in kind. Having established the basis of the liability, subsection (5) then identifies the secondary contributor—generally the employer, but not exclusively so—as the person who pays the new contribution.
The Bill deals next with the amount on which the contribution is to be calculated. That is determined by using income tax rules on scale charges for cars and fuel. Subsection (5), therefore, provides for the appropriate discounts and premiums, as well as excluding any case in which the car is not made available for private use or in which fuel is available for business travel. Having established the cash equivalent of the benefit of a car or fuel in that way, the amount of the contribution is calculated at the percentage rate set for the main employers' rate, currently 10·4 per cent. Subsection (5) also makes provision for employers who, because they have insufficient information, are unable to determine the relevant cash equivalent of the benefit of the car or fuel. The Bill provides that, unless the employer has information to the contrary, the cash equivalent is set at the highest relevant level. That will ensure that the discounts for high business mileage are available only to employers who can show that the appropriate conditions are satisfied.
Further provision is made to allow for this part of the legislation to be amended by regulation following any alteration to the main provisions of the Income and Corporation Taxes Act 1988. Any such alteration is most likely to be brought about by means of a Finance Act and the regulatory power in the Bill therefore avoids the need for additional primary legislation to follow any changes in a Finance Act. The power is limited to such amendment as is necessary or expedient.
Subsection (5) includes a regulation-making power to except persons from liability in prescribed circumstances or to reduce the class 1A contributions due. That power will be exercised only in very limited circumstances. Its purpose is to make special provision for the employers of those taxpayers who benefit from extra-statutory concessions currently made by the Inland Revenue. Broadly there are two such concessions. The first—I say this wearing my secondary, but in many ways more important, hat as Minister for Disabled People—allows disabled drivers to count their home-to-office travel as business mileage. The second grants exemptions from liability in certain circumstances in which a car is made available for use by a member of an employee's or a director's family. Once again, our aim is to ensure that our provisions follow as closely as possible those of the Inland Revenue. Our legal advice is that, under social security law, that can be achieved only by regulations.
Clause 2 extends the current arrangements for the collection of national insurance contributions to the new class 1A contributions. It includes provision for deciding who should pay the charge when employers share the cost of a car, allows for refunds in cases in which the contribution has been overpaid and provides a regulation-making power in respect of record keeping. That parallels existing provisions for class 1 contributions and will include, for example, the need for a record of contributions to be kept on deduction working sheets. The penalty provisions that exist in respect of other class 1 contributions have been extended to class 1A contributions and clause 2 also provides that previous non-payment of contributions can be declared before a court in cases in which legal proceedings are necessary to recover class 1A contributions.
The remaining four clauses, the House will be glad to hear, require only a brief explanation. Clause 3 extends the existing adjudicative system so that, where there is a dispute over class 1A contributions, employers will he able to apply to the Secretary of State for resolution of the question. Clause 4 provides that, as for all other contributions, a specified percentage of the new contributions shall be allocated to the national health service. That will make over an estimated £50 million to the NHS from the new contributions. Clause 5 contains provision for Northern Ireland. Finally, clause 6 contains consequential provisions and provides for the Act to have effect from 6 April 1991.
I have said that the purpose of the Bill is to put right an anomaly in the national insurance system which has arisen because of changing practices in employment remuneration. As a result of the Bill, employers will no longer find it so attractive from the financial point of view to pay their employees with cars rather than cash. The scale charge rules will ensure that contributions are levied on a valuation of cars and fuel which is easily understood and calculated. In 1992–93, we expect the new charge to

generate some £550 million in respect of company cars and a further £60 million in respect of fuel. In terms of overall labour costs, that amounts to about 0·2 per cent.
The charges will be spread among some 300,000 employers, so the additional financial burden should not be exaggerated. Instead, the provisions of the Bill should be seen in the context of the Chancellor's overall Budget judgment, which was good for business. Other Budget measures provide significant improvements, worth £750 million in 1991–92, for business. As now, employers will have a choice of whether they want to provide cars for their employees' private use. If they do, they will now quite properly face a contribution liability in just the same way as if they had paid their employees in cash. I believe that the provisions are long overdue and I commend the Bill to the House.

Mr. Graham Allen: I am pleased to open a debate on behalf of my party for the first time. It is a unique occasion for me and may be rapidly followed by another unique occasion when I say that there is little in the Bill with which I can find fault. As the Government approach their dying days, they seem to be adopting more and more Labour party policies, so this may not be a unique occasion. I shall welcome the occasions on which I am at the Dispatch Box and can concur with most of what the Government say.
The Bill is essentially part of the Budget and its provisions might sit more easily in the Finance Bill. I am pleased to take this chance to thank my eminent colleague, my hon. Friend the Member for Newcastle upon Tyne, East (Mr. Brown), for nursing me not only through the provisions of the Bill, but through the Finance Bill last year. That was quite an experience for someone like myself.

Mr. Tim Smith: Now we know who writes the hon. Gentleman's speeches.

Mr. Allen: Indeed.
I must admit to some surprise that changing the regulations on company cars requires a social security Bill, although my hon. Friend the Member for Newcastle upon Tyne, East will know that I am very much in favour of the budgetary process being opened up not only to include departmental Budget Bills, but to involve the departmental Select Committees of the House and outside organisations at the pre-Budget stage rather than having the wham, bam, thank you ma'am Budget speech that passes for the Budget process at the moment. A more protracted and intimate relationship between the Executive and the legislature is possible and essential in a modern democracy. My right hon. and learned Friend the Member for Monklands, East (Mr. Smith), the shadow Chancellor, is committed to considering improvements to the budgetary process. He is in the enviable position that almost anything that he ultimately proposes must be an improvement on the current arbitrary, truncated and secretive process.
The Bill relates to national insurance contributions to be paid by employers for the first time in respect of company cars and fuel made available for private use. Most people outside this place will know that in shorthand as the company car perk. Coming new to these matters, it was explained to me that, at its simplest, a company car is


deemed to add an amount to an individual's income which is liable for tax. The controversy has always arisen over the size of that amount. Seeing certain hon. Members in the Chamber today, no doubt further controversy may arise about the actual amount that should be added to the income and be liable for tax. It has been and remains considerably cheaper for an employer to provide £100-worth of benefits in kind than to provide £100 in cash as net income.
The most popular benefit-in-kind device is the company car. I understand that company cars account for 80 per cent. of all benefits in kind. That accounts for the importance of the company car and explains why the Government are taking on that benefit in kind before any others. I welcome the fact that the Government are considering the matter seriously.
There can be little doubt that the company car as a device for avoiding fair tax is destined to diminish in popularity whetever party is in government. The tax regime in the United Kingdom has favoured payment in cars rather than in cash. Despite Government attempts to move to a fairer system, some further evolution may still be necessary, as the Investors' Chronicle survey of executive cars reported last year after the previous Chancellor's bite at the issue. The Investors' Chronicle stated that that earlier attempt brought "a sigh of relief".
It could have been so much worse. Business had braced itself for a much higher rise, especially in respect of the 'perk' car which covers a small annual mileage. A rise of 50 per cent. in the scale benefit taxation and banding of Vehicle Excise Duty to penalise large cars had been forecast.
That report concluded on the rather weary note that future Chancellors would perhaps return to those issues and ensure that there was an equal balance between payment in kind and taxation.
In spite of the increasing burden of taxation under this Government, the effects of the recession and alleged corporate cost cutting, a recent report from the Monks Partnership revealed continuing and massive use of company cars in the United Kingdom in comparison to our neighbours. For example, in the United Kingdom 96 per cent. of senior financial posts come with a company car, compared with 29 per cent. in France.
The number of people paying tax on company cars has doubled to 2 million in the past four years according to the Inland Revenue. We appear to be a long way from the balance of advantage shifting towards using personal cars and claiming a mileage allowance for business use which is what some people would like to see. Fewer than 5 per cent. of companies expect to reduce the provision of cars and one quarter of employers intend to expand their fleets. It is still a matter of debate whether the proposals in this Bill have the balance right.

Mr. Couchman: The hon. Gentleman has just quoted most interesting figures about the number of employers who expect to reduce or increase the number of company cars that they provide. When was that survey carried out? Was it carried out before this year's Budget or afterwards? The hon. Gentleman's figures seem to conflict with information that I have read in the newspapers.

Mr. Allen: The survey was conducted after last year's Budget.
Britain still tops the European league for company cars because, even after the proposals in this Bill, Britain will still have by far and away the most favourable company car tax regime in the world. The movement on car perks by consecutive Chancellors may owe more to the eye that they are keeping on potential European directives and European average levels of assistance than to the proposal to eliminate market distortions.
We should be aware of the distorting effect of unfair taxation on the motor industry. There are several eminent representatives of that industry in the Chamber today and they may wish to refer to that point later. Over-concentration on the company car market can weaken its competitiveness overseas. Paying less in tax may encourage companies to accept a slightly higher cost for the vehicles. Higher specifications demanded by company car fleet managers may mean that vehicles are produced to too high a specification to be competitive in certain overseas markets.
Mr. Thompson, the vice chairman of the British Vehicle Rental and Leasing Association, said:
the corporate sector had tolerated such price increases and there is no sensible mechanism for controlling prices.
That may be part of the explanation why car prices in the United Kingdom are higher than in most parts of Europe. The Monopolies and Mergers Commission report referred to in last week's Financial Times showed that some pre-tax car prices in the United Kingdom are more than 50 per cent. higher than in other European markets.
Business buyers account for an estimated 65 to 70 per cent. of new car sales in the United Kingdom. The Financial Times stated recently that partly as a result of that
Manufacturers had felt able to impose price increases more readily than elsewhere.
When purchasing abroad is made easier after 1992, United Kingdom car makers may regret the price cushion that has distorted the company car market.
Another reason to tax company cars fairly was referred to by the Minister. They should be so taxed because of their adverse environmental consequences. According to a wide range of studies, company cars are used more, driven further and are larger than private cars. They are driven faster, and their drivers have more accidents, take more risks and drink more alcohol than the drivers of private cars. In addition, since 1988 free parking at work has been exempt from tax and national insurance contributions, adding a further incentive to bring cars to work and create congestion.
The National Economic Development Council has estimated that 90 per cent. of cars entering central London between 7 am and 1 pm are subsidised by companies. A study of free parking at work was recently carried out for the NEDC by Transport and Environmental Studies—or TEST. It was found that free parking is a more widespread perk than company cars and most motorists driving to work have their parking costs paid for. The TEST report proposed taxing company-provided parking spaces at a rate equivalent to their rateable or market values. TEST estimated the value of that perk as £2,000 a year for a space in the City of London and £300 a year in Swindon. I understand that the Treasury estimates are £1,500 and £500 respectively. Free parking has been estimated by Earth Resources research for Greenpeace to result in a £408 million revenue loss, comprising £288 million in tax,


£30 million in employees' national insurance contributions and £90 million in employers' national insurance contributions.
It should be noted that the exemption of tax and national insurance contributions on parking at work was introduced only in the 1988 Budget on the ground that calculations of its value were too complicated. Of course, since then the revaluation of business premises with the introduction of the uniform business rate has made valuation potentially easier.
The other main unresolved issue about company cars is evasion. There is some evidence that evasion is considerable and that much business use of cars is simply not declared There are considerable discrepancies between Inland Revenue figures for those declaring company cars and Department of Transport registration figures. Earth Resources estimate that as many as half those using company cars may not be paying their Full tax on them. There can be no question but that hidden subsidies to the car are detrimental not least to the taxpayer but to other transport users or providers such as the railways and other more environmentally friendly means of transportation. Greenpeace estimates that the company car subsidy costs £150 per household, or £3·4 billion, to the nation. Government funding for all forms of public transport is lower than the subsidy for company cars and investment in road transport.
A difficult matter that has been touched on by hon. Members is that the bona fide company car user is in a different category from highly paid executives who have a company car almost exclusively, as the Minister said, as an executive perk. That is a peculiarly British institution. The Investors' Chronicle put its finger on the issue when it said:
Only the naive believe that companies provide employees with cars merely to allow them to perform their duties properly. User-choices perceive their cars as a reflection of their status.
Indeed, 70,000 individuals have two or more company cars. Of those earning over £35,000 a year, a staggering 73 per cent. have a company car.
There appears to be consensus that the present tax regime penalises the high business mileage user but is overly generous to high status and low business mileage users. Even after the passage of the Bill, future Governments will need to rethink their policy and relate the level of taxation more closely to business mileage. One aim could be to ensure that the high business mileage driver can be better off with a mileage allowance on his or her own car rather than a company car. Placing national insurance contributions on company cars is a long-overdue rectification of an unfair anomaly in our tax system.

Mr. Couchman: Is the hon. Gentleman under the impression that national insurance contributions are not presently leviable on the use of a company car for private use?

Mr. Allen: That is not my impression at all.
Future Governments may also regard it useful to have established the first significant precedent of levying national insurance contributions on fringe benefits, although since May 1988 national insurance contributions have been levied on gilts, but I do not regard that as a particularly significant precedent.

Mr. Couchman: Will the hon. Gentleman give way yet again?

Mr. Allen: If I may be allowed to continue the rest of my speech——

Mr. Couchman: I should like to put it right.

Mr. Allen: I have been very generous in giving way. The hon. Gentleman will seek to make his own speech shortly.
A further serious problem that has arisen concerns value added tax. I should be grateful if the Minister would consider the problem. I presume that the Government are seeking to encourage the payment of cash rather than kind or smaller cars plus cash rather than large cars. However, it now appears that VAT could become payable by an employer when cars are retained in preference to cash in lieu of cars or when a small car plus cash payment is made instead of a large car. I do not expect the Minister to spring to the Dispatch Box to answer that point—it is rather complicated. It could be possible for one arm of the Treasury, VAT collectors and Customs and Excise, to undermine the policy direction that is evident in the Bill by levying VAT, and prevent people from switching to cash payments or smaller cars. I should be grateful if the Minister would discuss that matter in the Department to see whether that is the case.
The answer to a recent parliamentary question by my hon. Friend the Member for Newcastle upon Tyne, East on 30 April showed that the Budget changes will raise an extra £550 million in respect of cars and £60 million in respect of fuel. That was reaffirmed by the Minister. However, those yields will be reduced by £200 million due to employers claiming corporation tax or income tax relief on their payments. That additional income for the national insurance fund is most welcome, not least because the fund is still carrying the immense and unnecessary burden of the £6·7 billion bribe to encourage individuals to take out private pension plans.
The measure is a small contribution, but it is welcome. For that reason if for no other reason, we generally welcome the Bill.

Mr. James Couchman: I begin by declaring an interest. Since 1964, I have driven a company car. I have been allowed to use it for my private use. As chairman of my own family company, I drive an opulent Vauxhall Astra GL. I am concerned that the difference between the perk car and the workhouse car is inadequately differentiated by the Bill. The hon. Member for Nottingham, North (Mr. Allen) seems to be unaware that, since 1975, national insurance contributions have been leviable on fuel provided by an employer for private use.
I declare a further interest. Recently, my small company had a pay-as-you-earn audit. One of the few things that the inspector picked up was the fact that we were not paying national insurance contributions on private fuel. However, he admitted that until 1989, when the so-called green book was issued, the fact that a sum was leviable on the private use of fuel supplied by an employer was a dark secret known not even to PAYE audit inspectors. That is extraordinary. The inspector concerned actually wants to go back six closed years. Hon. Members will not be surprised to hear that we are contesting that.
The matter has been peculiarly badly handled by the Department of Social Security, and it is a great sadness to


me, having served that Department for several years, that I am in conflict with it on this matter. The matter has not been clear to employers or employees. What is more, the impost that my right hon. Friend is being asked to make is to balance this year's Budget. Let us be under no illusions. It is interesting that my right hon. Friend the Minister of State answered our hon. Friend the Member for Hampstead and Highgate (Sir G. Finsberg) in an evasive manner when our hon. Friend asked where contributions would reflect in benefits from the Department of Social Security—contributory benefits, presumably. That point was not answered.
When the Minister replies, I should be grateful if we could be told where that substantial sum of £0·–5 billion will manifest itself in benefits for employees. It is interesting to note that the £0·75 billion of benefits in this year's Budget, which are apparently good for business, are shaded by the clawback under the impost. We are talking about the national insurance fund because the money that is raised by the contributions will go into that fund. Can we be sure that that fact will be reflected in the benefits to employees, and that it will not be clawed back by the Treasury to balance this year's budget?
I am also worried about what the provisions will do to the British car industry. I have no doubt that my hon. Friend the Member for Birmingham, Northfield (Mr. King) will wish to make his own contribution on that score, because I know that he will be worried by the fact that the British motor industry will certainly not benefit from any diminution in the provision of company cars. From the newspapers that I have read in the past few days, I understand that companies are now preparing to buy themselves out of the provision of motor cars by providing large additional salaries. I have read the figure of as much as £10,000 per year. Clearly, that would be for a more opulent car than my Vauxhall Astra, but the principle is clear.
As I have said, I wonder about the damage that that will do to the British motor industry because if we buy our cars ourselves, we tend to go abroad for them rather than buy from the home market. That is because of the perceived benefits of other-than-British motor cars. As the big fleets comprise largely British motor cars, any diminution in the provision of company cars by employers will damage the British motor industry.
The other thing that I should like to make clear——

Mr. Tim Smith: Before my hon. Friend gets on to the other thing, does he not agree that it is an appalling indictment of the British motor car industry that, apparently, it is sustained at the moment only by company car fleets, and that, if individuals had a choice, they would go abroad for their motor cars?

Mr. Roger King: rose——

Mr. Couchman: My hon. Friend makes a valid point, to which I see that my hon. Friend the Member for Northfield wishes to reply.

Mr. King: The point is not that the private buyer is disillusioned with the quality of the British-built product; it is that, if the private buyers want to drive something that is more original and a little different, as opposed to something that can be seen in the average driveways of the

kingdom, such as Cavaliers, Montegos and Sierras, that buyer might be tempted to buy something from an overseas manufacturer. But that in no way reflects any inadequacy in the British product.

Mr. Couchman: I am grateful to my hon. Friend for that intervention, because my son, who is aged 22 and is car mad, speaks pejoratively of the Cavalier as "the rep's motor" which, indeed, it is; as my hon. Friend has said, many of the big fleets consist of Cavaliers, Sierras and Montegos. That is why I think that the provisions will do considerable damage to the British motor industry.
I have another brief point to raise—I know that the House will not want to be detained by me for any great length of time on this point. I refer to the concept that, in some magic way, someone on £8,500 is a higher-paid employee. I pay more than that wage in my business to bar staff and it is my understanding that £8,500 is about two thirds of average earnings. One can hardly consider that a representative who earns £8,000 or £9,000 a year and who is on two thirds of average earnings is a higher-paid employee. The impost will hit hard the companies of those who are quite lowly paid.
I hold no brief whatsoever for the company director who never uses his company-provided car for business and for whom that car is a pure perk. I am happy to see such company directors pay tax on their cars. However—I come back to where I started—the impost will be unfair on the companies of those people who use their company-provided car for their job and who cannot otherwise do that job sensibly or viably.
Eighteen thousand miles may seem a high mileage, especially to those who do their business in London and the home counties, but I doubt whether those whose business is in rural areas and who have a wide area to cover will regard it as a high mileage. There should be some differential between those people who do their business miles in London and those who do them in rural areas, where miles come easily on to the mileometer.

Mr. Archy Kirkwood: I have no intention of opposing the Bill, but should like to support some of the comments of the hon. Member for Gillingham (Mr. Couchman), especially his point about the number of miles travelled for business purposes. That is important to me, coming from a rural part of Scotland and representing a rural constituency. I hope that the Government will give further consideration to that matter.
I start by being slightly pedantic. I do not accuse Social Security Ministers on this point, because I know that they are not masters of their own destiny when it comes to the way in which legislation is put through the House. However, I am puzzled and a bit nervous about such legislation being put through all its stages in one evening. I am doubly worried because, as a result of this matter being part of the Budget provisions, there was not much time to canvass views more widely before the measure was announed in the Budget statement.
We have had an assurance—I am sure that it will be honoured—that there will be consultations thereafter, but bringing forward such primary legislation on an evening like this and with a low attendance of hon. Members is a casual way of submitting the legislation to the statutory processes. There must be constitutional and legal reasons for it, but I cannot understand why the Bill does not form


an integral part of the Finance Bill. I have no doubt that hon. Members who serve on the Finance Bill Standing Committee will spend long and happy hours upstairs considering the totality of the Government's financial proposals in the Budget. That would be a much better vehicle for giving this measure the proper consideration that it is due.
It is a small Bill, and I agree with the hon. Member for Nottingham, North (Mr. Allen) that it is a technical Bill which is difficult to understand, but £550 million-worth of national insurance fund contributions are to be raised, with an additional £60 million from fuel. As that is a very big sum of money on any definition, for that reason alone we cannot dismiss the Bill as unimportant.
I am interested that the financial and explanatory memorandum states that "50 staff years" of additional manpower are involved. The Minister of State skated over this matter—I do not know whether he did so deliberately—but he seemed to think that the extra administrative costs were fairly small beer. I wonder whether that will be the perception of the people who will have to pay the contributions for the new administrative scheme.
If the Government are to bring in the extra impost, I agree that the Inland Revenue machinery is by far the most efficient and least disruptive way of doing so, but it is not enough to say, "Using the existing systems will make no difference," because I do not think that that is true. There will be a significant increase in bureaucracy, which will fall on the shoulders of the employers, many of whom will be small employers.
Although the provision of company cars has been abused and, as the hon. Member for Gillingham said, the Government are right to tackle that abuse, there is a world of difference between the tax perk that is now an accustomed part of the stock in trade of the finance directors of big firms where fleets of company cars are used as a form of surrogate remuneration, and the little knitwear companies in my constituency, such as in the town of Hawick, which have only one works van. They use the works van six days a week to take the piecework to the outworkers so that they can knit up pieces of garments and bring them back to the factory for processing and packing. They also use the van at weekends.
I listened carefully to the Minister's speech and I assume that employees such as district nurses in rural areas will not be affected by the Bill.

Mr. Couchman: We have also had representations recently from charities that allow cars which are provided to people earning more than £8,500 a year to be used for private mileage, so the Bill will be an impost on charities.

Mr. Kirkwood: Some employers that are not commercial organisations will be caught under the provisions. I am anxious that we should have a full discussion, and that Ministers provide a complete explanation of the extent of the Bill's effect before we take it further.
I agree with the hon. Member for Gillingham that the Government should reconsider the limit of £8,500. The Bill will have a dire impact on employers and employees of small companies. That figure represents only two thirds of average national earnings. That is not a large sum of money, and I cannot work out why the Government decided to impose a limit at £8,500; the figure cannot have been plucked out of nowhere.

Mr. Tim Smith: It has always been like that.

Mr. Kirkwood: That is news to me. I freely confess my ignorance; I am sure that the Minister will confirm whether what I have said is the case. If it is an established figure in Inland Revenue rules, that is obviously why it was chosen. Has the Department considered the effects that it will have, and have Ministers considered the possibility of making exemptions so that the tax would not affect small businesses and the directors and employees of small companies who earn relatively small salaries, as £8,500 is a small annual income?
The Minister said that the Bill will affect 2 million cars and 300,000 employees. Do the Government have any idea how that figure is broken down? What is the profile of the average employer or employee that the Bill is designed to catch? If it is big companies and their employees, I would find it easier to allow the Bill to complete its passage. However, if the burden will fall disproportionately on small companies, I would see it from a different perspective.
Finally, I should like some reassurance. Have the Government considered using engine size as a way of bringing back into control the abuse of company cars? The Minister made a valid point when he said that there are environmental aspects to controlling the use and abuse of company cars.

Mr. Tim Smith: It depends on the size of the engine.

Mr. Kirkwood: I am perfectly well aware that there is a scale for company cars based on engine size, but the Government have the possibility of making it more advantageous financially for companies to buy smaller cars, so that company directors would run around in 1300 cc Vauxhall Astras. Have the Government considered making smaller cars totally exempt from taxation? In future, all Government Departments will have to look at the tax burden on motoring costs in general.
The Government are right to end the present anomaly. I am certainly prepared to allow the Bill a Second Reading, but I object to the way in which it is being put through the House in one evening. The Government still have to answer some of the questions about which people will carry the cost of the new impost that the Bill will introduce.

Mr. Roger King: I do not welcome the measure, although I well understand the difficulties faced by my right hon. Friend the Minister in presenting the Bill this afternoon. The measure was included in the recent Budget, so it is no surprise that it has surfaced today.
It is unfortunate at this time in our economic resurgence to place further financial burdens on our motor industry. I do not disagree with the motives behind the claim that the perk that the company car offers a number of working people needs to be tackled. About 10 per cent. of those who have company cars have them simply as a perk. I am concerned that, in tackling the problem in order to raise money—my right hon. Friend explained earlier that the measure was designed to bridge a financial gap in the Budget—it is likely to have some disadvantages that the Government have not thought through thoroughly.
The problem with the company car was created when we had stop-go wages policies, and employees were


rewarded with company cars instead of salaries, which were then very heavily taxed. That trend started a process which has grown into the present problem. However, it goes further than that. The United Kingdom is a densely populated country, and our population is scattered throughout our land. We seek to bring employment and opportunity to all regions of the kingdom, and the only way to do that is by means of a system of communications which is available to everyone, and for people to travel freely.
If we are anxious to create jobs and employment prospects in remote areas, we must enable the equipment needed for that employment to be purchased relatively cheaply and to be readily available. That is why the car has played such a formidable part in bringing employment to the more remote areas of our country. Jobs cannot depend on rail connections, if there are any. Businesses cannot wait for the next bus to turn up. They need components and goods to be supplied when they want them, and people must have the opportunity to make deliveries.
The necessity for the true company car has been overshadowed by the perk element, which has got out of hand in recent years. In successive Budgets, the Government have raised the tax bands, and that has brought the company car into balance between a perk and an essential business tool. The proposal we are discussing cannot be seen in isolation. It has to be considered in terms of the increase in tax bands that the Chancellor announced in the Budget, plus the 2·5 per cent. increase in value added tax. A car attracts 27·3 per cent. tax. No other product on sale in the Kingdom is taxed that highly; in Germany, there in only a 14 per cent. tax on cars. The combination of measures that the Government have introduced has exacerbated a problem which may come to the fore during the next few months.
There is no doubt that the British car industry is enjoying a good time, but I must stress that it is the manufacturing industry—times are far from rosy in the retail sector. About 350 large dealers have gone out of business in the past year. Nevertheless, manufacturers have been able to sustain and even increase production as a result of producing goods which have an enviable record for quality and market acceptability, and they are exporting increasing quantities. We need a strong and healthy home market behind those exports, and we do not have one at the moment. Sales are declining: they are now down to 1·6 million units per year, from a high of 2·3 million in 1989.
My fear is that the combination of measures introduced in the Budget and in this Bill will further exacerbate that problem. There are signs that the European market and other world markets, which are not untouched by the change in the world economic climate, are tending to dry up, and manufacturers in the United Kingdom will not have a buoyant home market to pick up the shortfall that will result from dwindling imports.

Mr. John Carlisle: I apologise for not hearing my hon. Friend's opening remarks. Manufacturing industry is now heavily dependent on the export side, especially in the case of General Motors in my constituency, as 80 per cent. of its Vector cars, produced at Luton, are going for export. My hon. Friend is right to point out that that market is very fragile. Because of the

nature of the country that they are going to—Germany, which has its own problems—those exports could dry up at a stroke. That is why this further blow to the manufacturing industry must be considered by the Government, and I agree with everything that he has said so far. Manufacturing companies could be in a serious position if those exports decline or disappear before the end of the year.

Mr. King: My hon. Friend endorses my argument. The Vauxhall Cavalier is the biggest selling fleet car. Any shortfall in demand from the United Kingdom market will have a substantial effect upon the viability of General Motors' operations in this country. That fact needs to be stressed, because the car industry offers tremendous opportunities. We have few industries which can look forward to a positive expansionist programme in the next 10 years and which can largely overcome our balance of payment difficulties. Some forecasters predict that, by the year 2000, the motor industry alone can bridge the gap in our balance of payments deficit, provided that it has the encouragement it needs to expand and invest.
One of the reasons that the United Kingdom has proved attractive to incoming investment from companies such as Nissan, Toyota and Honda is that there is a substantial bedrock of sales in the company car sector. Whatever one might think about the evil nature of the company car, it has enabled the United Kingdom market to sell 700,000 cars a year to that sector. It is a lucrative market for manufacturers, and as a consequence it has attracted many overseas companies, which come here and set up plants to cater for it.

Mr. Couchman: My hon. Friend's argument about the company car market is valid. The hon. Member for Nottingham, North (Mr. Allen), who opened the debate for the Opposition, made much of the fact that 65 per cent. of new car sales are to the company car market. However, I heard the other day that there are 20 million cars on our roads and only 13 per cent. are company-owned, because they are sold off.

Mr. King: My hon. Friend is correct. The average life of a company car is three years. Some are called company cars but are bought by companies such as Hertz and Avis, and have a life of nine months before they go into the used car market. Companies seek to dispose of company cars after three years. The Budget caused a problem within the industry, as companies are tending to replace cars after four years, and it is difficult for the British car industry to bridge that one-year gap.
It is evident that when employers consider the costs of providing a company car there is a strong temptation for them to buy out that perk—if one can use that expression—and replace it with a higher salary. Perhaps an economist could point out the consequences of that for inflation.
Also, there is the risk, as has been said, and as research shows, that, if employees are left free to buy their own cars, they will not want to buy a Vauxhall Cavalier or a Sierra—excellent though those products are—but will choose something a little more individual, which will almost certainly be imported either from Japan or from the rest of Europe. That is a fact of life. We do not always want to be like everyone else in the street. We want to express our individuality, so we buy something a little different. In car industry terms, such a product will come from abroad. It


does not need many people to do that before it has a substantial impact on the United Kingdom car industry, and that would have serious consequences if it were repeated on a grand scale.
Undoubtedly, the House will see fit to approve the proposals before us, but I feel that it is right to express a few cautionary remarks. I accept that, having been landed this legislation, my hon. Friend the Minister cannot restructure the way in which these new charges will be imposed, but I certainly hope that the Government will see whether they can arrive at a fairer system.
The distinction between perk car and work car has defied Government for some considerable time. They tend to cover the lot by using some sort of mileage cutoff point, on the assumption that someone who does 18,000 miles a year is driving a works car and that someone who drives less is presumably driving a perk car. That is a crude dividing line, and it is long overdue for overhaul.
The first impositions made by the Government, taxing company cars and their benefits, were rough and ready and did not have a hard hitting financial impact upon users. That impact has become progressively harder, until it is now arguable whether there are any benefits in having a company car. With the addition of national insurance charges, the balance is definitely tipped against the company car in all respects.
The Government should redouble their efforts to arrive at a fairer banding system. It does not make any sense for the person who has a Sierra or a Cavalier estate, who perhaps services and maintains products or provides replacement goods for shops in central London and drives only 6,000 or 8,000 miles a year—although he spends a large part of his working life in his car, which is a business tool—to get little discount because he does not do the arbitrary limit of 18,000 miles.

Mr. Couchman: Is my hon. Friend aware that to do 18,000 miles in London, where the average speed is 12 mph, requires about 30 hours' driving a week, which is near to a working week?

Mr. King: My hon. Friend endorses the point I am making.

Mr. Tim Smith: Give that sort of driver a van.

Mr. King: I am sure that some employers consider the suggestion that my hon. Friend the Member for Beaconsfield (Mr. Smith) makes, but few will want to drive, say, a Transit or Sherpa van to deliver some fuses or packaging or cartons of cigarettes or sweets. A van is a large vehicle to use in London and is hardly environmentally acceptable if instead one can use a small car.
I hope that the Minister will redouble his efforts to draw up a more equitable system of bands. It would be fairer to have a cut-off point of 10,000 miles, with anything over that attracting a 15 per cent. discount; a cut-off of 18,000 miles for a further discount; with a maximum cut-off of 24,000 miles—a very high mileage, which should confirm that it is a genuine company car which should attract an even bigger discount. That would be fair to those who must have a company car as a tool of the trade.
The subject must be examined from the employee's point of view. I hesitate to suggest that employees do not welcome a company car; sometimes it is not the product or style that they want, but it goes with the job. The job

usually reflects the advantage of a company car by attracting a somewhat lower salary than one might normally expect. For an employee to have the privilege of a company car standing in his drive, his employer must pay the extra charges, and that represents an enormous and unique imposition. After all, if a secretary has a piece of vital equipment on her desk—say, a word processor—to improve her working performance, neither she nor the company is taxed on the cost of that equipment.

Mr. John Carlisle: Perhaps my hon. Friend should remind my hon. Friend the Member for Beaconsfield (Mr. Smith) that a company car is often an essential tool of business. If we tax everything that looks like a perk—any article that might have a feel of luxury about it that we take home—where do we stop? We must consider the principle involved. [Interruption.] I assure my hon. Friend the Member for Beaconsfield that we are not dealing with a laughing or flippant matter, since the retail and manufacturing sectors of the motor industry are reeling from the taxation proposals.
Along with ridiculous statements that have been made about car phones, the impression has been given that the Government are against the car manufacturing industry, let alone against company cars. I am glad that my hon. Friend the Member for Birmingham, Northfield (Mr. King) has not taken any notice of some of the naive remarks of my hon. Friend the Member for Beaconsfield.

Mr. King: My hon. Friend may not have been aware that I had picked up a remark about vans by my hon. Friend the Member for Beaconsfield. Many employees have no choice, because their companies require them to take their cars home, often because they are on call. A plumber or electrician or an employee providing any other service to the community is on call, as is the company car.
A company based in Birmingham might have a representative in Basingstoke. It is suggested that every night, having finished servicing whatever it is in the Basingstoke area, that employee should take the car back to the works in Birmingham, go home to Basingstoke and repeat the journey the following morning to pick up the vehicle? That is so ludicrous as to be beyond comment. In such a case, the company car is a piece of business equipment and only as a side effect would it be used at the weekend. Indeed, an employee driving a company car doing a high mileage would not want to drive hundreds of miles at the weekend.
One could make a strong case for an almost total exemption from the type of measure we are debating. As I said, I accept that the measure will receive the approval of the House. Even so, we should examine some of its technicalities. We should examine the structure of the tax banding of company cars. We must consider that in the context of the Finance Bill, and perhaps we shall have an opportunity in due course to do that.

Mr. Tim Smith: My hon. Friend the Member for Birmingham, Northfield (Mr. King) is a doughty fighter for the motor industry. If I represented his constituency, I would have made many of the remarks that he made, and we appreciate the position in which he finds himself. My constituency allows me to take a wider view of the issues, although I probably have a high proportion of company car drivers among my constituents.
I know from my experience in industry what goes on. There is much status-seeking among company car drivers. I recall getting my first job in industry and my first opportunity to drive a company car. At that time, the large accounting firms did not give company cars to their employees and getting a car was for me an attraction of moving to industry. I was asked what sort of car I would like. I asked how much I could spend. Having been told, I went hunting for a car with all the right knobs; I wanted a GT with power steering and so on.

Mr. Couchman: Why not?

Mr. Smith: I agree with my hon. Friend. From my point of view, it was a reasonable desire because I wanted the best possible car and the best remuneration package. But this debate is not about the interests of individual company employees. It is about how we tax what, in view of what I have said, is clearly a perk.

Mr. John Carlisle: No.

Mr. Smith: I disagree with my hon. Friend. The matters which interested me had nothing to do with the economic performance of the company. I was looking for the best deal, and who would not? We should be considering the economic performance of industry. We have heard much in the debate about the difference between perks and the tools of the trade and about vans. Company vans are not subject to this type of taxation. When buying a company van one does not pay car tax. The input VAT is recoverable against the output VAT, unlike the VAT on a car, and no taxation is paid in terms of a benefit in kind.
My hon. Friend the Member for Northfield referred to service engineers. They might be better off with company vans, on which tax would not have to be paid. We must concentrate on the fundamentals of the subject.

Mr. John Wilkinson (Ruislip-Northwood): I imagine that during his business career my hon. Friend has taken clients to lunch, for example, to discuss important business arrangements. Would he suggest that overseas clients should be taken to a restaurant in a van?

Mr. Smith: I normally use a taxi in such circumstances. I was not aware that service engineers took customers to lunch. But since, according to my hon. Friend the Member for Gillingham (Mr. Couchman), they spend up to 30 hours a week driving, perhaps that is what they are doing.
I accept that for some people a company car is essential. We recognise that it is taken home at weekends and is driven on holidays and so on. It would be possible for company employees to emulate Ministers and take cars from a pool. They could travel to work by public transport and use a pool car for their work.

Mr. John Carlisle: Rubbish.

Mr. Smith: Companies could make such an arrangement. If Ministers can do it, so can other people.
The Bill has my full support. It is part of a much wider Budget judgment and the issue that we must consider when discussing the future of the car industry is the same issue as we must consider in relation to the future of every industry.
The Budget was excellent for business and we must set against the points that my hon. Friend the Member for

Northfield made the fact that it reduced corporation tax progressively by 2 per cent. My hon. Friend said that Japanese car manufacturers have invested in the United Kingdom because we have a large company car fleet. Although that may have been a consideration, there were far more important considerations such as the fact that we have a good industrial relations record, a low-wage economy and the most attractive corporation tax regime in Europe. It has now been made even more attractive by virtue of the Budget, which cut corporation tax by 2 per cent., benefiting industry by some £830 million in the year when the levy will first be raised.
In the light of the Budget, the measure is entirely sensible. I sympathise with the hon. Member for Nottingham, North (Mr. Allen), who said that it should have been introduced in the Finance Bill. But the hon. Member for Newcastle upon Tyne, East (Mr. Brown) and I are representing the other 39 members of the Standing Committee and we should be able to tell them next week what was said in this debate. Although I sympathise with the view of the hon. Member for Nottingham, North that it is rather anomalous, it comes about by virtue of the fact that social security benefits and contributions and the whole national insurance system are separate from the income tax system, as they should be.
I am interested in the new Contributions Agency established on 1 April, which will have the job of collecting £550 million in June next year and in subsequent years. In view of the sum involved, I am sure that the Public Accounts Committee will want to look at the agency's performance. That is why I raised the matter with my right hon. Friend the Minister of State. The hon. Member for Nottingham, North referred to the possibility of evasion and suggested that it could be on a wide scale. If so, the Public Accounts Committee should examine that problem.
On the general principle, I believe that the Government are right to tax all benefits in kind across the board, so that they are treated, for the purposes of tax and national insurance, as far as possible like cash payments. That seems to be the right philosophical approach. Although the hon. Member for Nottingham, North implied that the measure had come rather late, it would not have been possible to introduce it much earlier because it was only in the 1989 Budget that employers' contributions were extended up the scale and it would have produced relatively little revenue before then. Therefore, the timing is right and, in due course, we may consider extending the levying of employers' national insurance contributions on other benefits in kind; it would be a logical extension. However, company cars are the biggest benefit in kind paid to employees.
My hon. Friend the Member for Gillingham referred to the current position. I am not sure whether the hon. Member for Nottingham, North was aware of the fact that a national insurance employer's contribution is already charged on private fuel. It was causing considerable difficulties before this measure was introduced. I wrote to many finance directors last year about tax implications and it was one of the main issues that they raised in their replies. They said, "We hear what you say about income tax, but are you aware of how hellish the Department of Social Security is making life for us by levying national insurance contributions on private fuel?" They said that company employees who pay for their fuel with a plastic card and present the card before they fill up their car with petrol pay no contributions. However, if they fill up their


car first and hand in their card afterwards, they must pay contributions on the cost of the fuel. That sounds like bad news for those who must keep the books or records. I wrote to my hon. Friend the Minister for Corporate Affairs, who was in charge of the deregulation unit, and said that he should look at the problem. I suggested that there should be a scale charge. The Bill now introduces a scale charge for fuel as well as for cars and that excellent change will lighten the load on employers.
The hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) referred to the fact that there would be 50 extra staff and additional burdens on employers. I wonder how much the charge will create an additional burden on employers, given the fact that it will be levied in the same way as income tax, through the P11 D, and that employers were having such a hard time before in their record keeping. The measure should be relatively simple because the same scale of charges will be applied for both income tax and national insurance. I hope that it will not be too onerous because I am reluctant to impose additional burdens on employers who are already unpaid collectors of tax on behalf of the Government.

Mr. Couchman: My hon. Friend suggested that the contributions will be levied through the P11D mechanism, which is principally aimed at levying tax on the employee rather than the employer. It is often levied through a diminution in the code number much later than was suggested by my right hon. Friend the Minister of State in his opening remarks. I suspect that the mechanism may prove to be not nearly so simple as we were led to believe earlier in the debate.

Mr. Smith: I referred specifically to the P11D. The information required to complete the P11D form is the same as is required to pay employers' national insurance contributions on cars and private fuel. I accept that the P11D is a statement to the Inland Revenue about employees' benefits in kind, so perhaps I should not have referred specifically to it. The point that I wished to make was that the information is common to both requirements. Employers will not need to keep much new or additional information because of the Bill. I listened to the comments of my right hon. Friend the Minister of State on that subject and it did not seem that much additional information would be needed. Perhaps we can return to that important issue later.
As I was saying, some employers were having a hard time—my right hon. Friend the Minister of State may also be having a hard time with his pay-as-you-earn audit—because of the previous arrangements for collecting contributions on private fuel. The scale charge introduced by the Bill is a major improvement.
For those reasons, the Bill is to be welcomed. Benefits in kind should be taxed in the same way as cash. I recognise the problems of the motor industry, but they can be better tackled in other ways, rather than trying to solve them by looking at the way in which we tax benefits in kind.

Mr. John Wilkinson (Ruislip-Northwood): I hope that those who have participated in the debate will not think me rude for coming in rather late. I do not normally seek to catch your eye, Mr. Deputy Speaker, unless I have heard the opening speeches. However, the title of the Bill is

somewhat misleading. I thought that it must have something to do with social security, and not being a social security expert, I kept away. As soon as I entered the Chamber I realised that a more appropriate title might have been, "Clobber the Motor Industry yet more through Additional Social Security Contributions Bill". It is a silly little Bill—an unworthy little Bill—and is totally inappropriate for a country that is in deep recession with thousands of people being laid off in the motor industry and elsewhere. I believed, perhaps naively, that the Conservative party and the Government were primarily engaged in trying to support and encourage businesses, not in introducing pettifogging little measures that further damage them. I may have been ingenuous, but I also thought that we were not primarily tasked to create additional unproductive jobs in the public sector and not in the business of creating additional quangos such as the Contributions Agency.
I thought that we were sent to this place by those who elected us to do everything in our power to support British industry and those who work in it. I see nothing in the Bill that will have this effect, but quite a lot that will do considerable damage. My hon. Friend the Member for Birmingham, Northfield (Mr. King), who is an expert on the motor industry, and my hon. Friend the Member for Luton, North (Mr. Carlisle), who intervened, spoke from the heart and the head, and with experience.
I must declare an interest and, in case hon. Members think that it is a matter of special pleading, I shall disabuse them of that notion. I am a director and the chairman of a small marketing consultancy. My own little company is in business to promote, largely overseas, the sale of British equipment. For companies such as mine, and many other small businesses that are primarily engaged in selling, a motor car is absolutely indispensable. I find it incomprehensible that Her Majesty's Government should be putting further imposts on company cars at a time of recession. It is even more surprising that they are using the social security system as a means of doing so.
Other hon. Members have referred to the arbitrary earnings limit of £8,500 per annum for employees. Many company directors do not even earn that, and their companies will now have to pay national insurance on their company cars, as well as for any fuel used for private purposes. The amount of revenue generated will be relatively small and it would have been infinitely more honest not to use the national insurance fund as a vehicle for bringing more taxation into the Government Exchequer. I believe that national insurance resources fund only about 10 per cent. of pensions and that the rest come out of taxation. If that is so, and we use the national insurance fund as a means of gathering revenue, it would be much more straightforward to abolish it—at least, it would be much more honest.
Does my hon. Friend the Parliamentary Under-Secretary of State think that the Bill is well drafted? I think that it is a masterpiece of gobbledegook and a fantastic testimonial to the incomprehensible. I am sure that my hon. Friend will be able to clarify clause 1(6)—if she cannot, the legislation should not be passed. Clause 1(6) states:
In calculating for the purpose of subsection (4) above the cash equivalent of the benefit of a car or fuel—(a) the car shall not be treated as being unavailable on a day by virtue of paragraph 22)(b) of Schedule 6 to the Income and Corporation Taxes Act 1988 for the purposes of section 158(5) of that Act or paragraphs 2(2), 3(2) or 5(2) of that


Schedule, unless the person liable to pay the contribution has information to show that the condition specified in paragraph 2(2)(b) is satisfied as regards that day".
My hon. Friend the Under Secretary nods her head wisely. I admire her. But civil servants would be much better employed not producing such nonsense. The motor industry would be much better if it were allowed to get on with its job of satisfying the customer without such an idiotic little Bill.
We have a serious recession on our hands and it is important to get on and address it, and support the motor industry. I had the honour and privilege of being awarded a parliamentary industrial fellowship with GKN, a major automotive supplier, of which there are countless up and down the land. Any measure passed by the House which has a depressing effect on the automotive industry in general can only be deplored and should be rejected. I shall not bother to vote against it, because almost all Opposition Members have now gone; what they said had little to commend itself to me.
The hon. Member for Nottingham, North (Mr. Allen) talked about yet more taxes. There has been an element of obfuscation surrounding the measure. Her Majesty's Government were, at least implicitly, kowtowing to the green lobby by suggesting that imposing such an impost and increasing taxation on company cars would benefit the environment. All that they are doing is to add to the dole queues, which is not worthy of them.

Mr. John Carlisle: Like my hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson), I apologise to the House for not being present at the start of the debate. Like him, I saw the measure on the Order Paper and assumed that it was a social security matter. It was only when I came into the Chamber to hear the debate that I realised the enormous impact that the measure would have on the motor industry.
I immediately declare a professional interest: I am a non-executive director of a medium-sized motor retailing company. My constituency interest is already known—part of my constituency contains Vauxhall Motors, the largest employer in Luton. As my hon. Friend the Member for Birmingham, Northfield (Mr. King) said, the company has enjoyed a certain amount of prosperity during the past few years, and has brought back boom times to my constituency town.
However, I fear that if the Government continue with the various measures proposed in the Budget and other provisions, such as the special car tax, those boom times could well be over, not just for us as a manufacturing town but for many other companies that will be deeply affected by this imposition on the company car.
I agree with my hon. Friend the Member for Ruislip-Northwood that this appears to be a shabby little measure which says more about the politics of envy than the politics of good sense. Frankly, we are more accustomed to hear about such measures from Opposition Members than from Conservative Members. The Government do themselves no credit with this Bill, which stupidly panders to the so-called green lobby and fails to recognise the enormous improvements that the industry has made to reduce noise and air pollution over the years.
Social security Ministers and their colleagues in the Treasury must understand that the measure will have a devastating impact on the car industry if it means, as I believe it could, that many companies decide that the company car is not for them and, perhaps more important, employees decide that the benefits of a company car do not make it worthwhile to pay the tax. There are about 150 to 200 company cars in my company, which is now considering charging its employees for the use of their cars because of the additional cost of the national insurance. Therefore, employees will be further penalised.
My hon. Friend the Member for Northfield was absolutely right to say that if people do not have company cars, which are generally British, or are given some other financial benefit in kind, they buy foreign cars. My hon. Friend the Member for Beaconsfield (Mr. Smith) made a ribald comment about that. However, when a large employer that gave its employees hefty discounts on certain British manufactured cars withdrew that discount and gave money in lieu, nearly every employee bought a foreign car—I shall not name the company.
The measure is not worthy, because, as my hon. Friend the Member for Ruislip-Northwood said, for various reasons the motor industry is on its knees. The figures for new car sales are dramatic—350 motor retailers have gone out of business in the past 12 months. Every manufacturer is reporting that new car sales are at least 20 per cent. lower. It is only the service industry and, to a certain extent, the contract hire and retail side which are keeping many retailers in business. For the Government to bring forward such a petty little measure is disgraceful. It is viewed with utter dismay by manufacturers and retailers at a time when we should be looking for assistance for them.

Mr. Roger King: My hon. Friend is the second person to refer to the Bill as a petty little measure. It is not a petty or a little measure: it will raise a large sum of money. That is the problem. If the amount involved were little, we would not worry unduly, but nearly £500 million will come out of the pockets of companies which will have difficulty in replacing it. Something will give. My fear and that of my hon. Friend is that it might be British industry.

Mr. Carlisle: I thoroughly agree, and I thank my hon. Friend for pointing that out. The pettiness is perhaps in the minds of those who conceived the idea.
The motor industry is crucial to the fortunes of the country. Let no one forget that. The Conservative party has always supported free choice on transport. We have always controlled strictly pollution within the industry. Indeed, the industry has carried us through rough times. We are now in deep recession both inside and outside the industry. The measure will sadden the hearts of our supporters and of people in the industry.
The Bill should be rejected by the House, but I will not embarrass my hon. Friend the Member for Tatton (Mr. Hamilton) by going to get my hon. Friends out of offices and bars to vote against it. That might be even more embarrassing for the Government. However, many of us are deeply upset by the measure. Had we the opportunity, we would vote against it.

The Parliamentary Under-Secretary of State for Social Security (Miss Ann Widdecombe): We have had an interesting debate, with three main themes, all of which I


believe to have been ill advised. The first was a misconception, particularly on the part of my hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson), that somehow the Bill will cause great financial embarrassment and will have huge economic effects on the car industry.
We should see the matter in context. The overall labour costs of the industry for this year will be £300 billion. We are talking about a sum of £500 million. We are talking about an increase in cost of 0·2 per cent., whereas labour costs alone, through wage rises, are likely to increase by 7 per cent. to 10 per cent. We have to keep in context the alleged financial effects of the Bill on the car industry.

Mr. Wilkinson: Does not my hon. Friend realise that, at a time of recession, when jobs are being lost in the motor industry, Her Majesty's Government, if they are to act wisely, should eschew any additional impost which would put an extra adverse burden on the motor industry or which would depress demand further? As for small businesses, they will get virtually nothing from the Budget. Those with the lowest profits will get no reduction in corporation tax. The requirement to pay national insurance on company cars is yet another unwelcome, adverse development. My hon. Friend should not be so glib.

Miss Widdecombe: My hon. Friend makes the point for me by admitting that in the Budget there is a net gain to the industry through the reduction in corporation tax.
In answer to the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood), may I point out that the vast burden will fall on large employers rather than on small employers in relation to company cars as tools of trade.
Fear has been expressed. most notably and eloquently by my hon. Friend the Member for Gillingham (Mr. Couchman), about the administrative burden that the provision will place on the motor car industry. In fact, there will be very little administrative burden. There should be a lightening of the burden. He referred to the current arrangements of levying on fuel, which we admit are more complex than we had intended.
Two themes run through the Bill. The first is to make things easier for employers by replicating exactly the provisions of the Inland Revenue, so that it will already have to hand the information, the system and the calculations. The provisions will replace the complicated administrative system that was required following the overdrive decision to which attention has rightly been drawn. In this instance, the effect will be wholly beneficial.
I congratulate the hon. Member for Nottingham, North (Mr. Allen) on his first speech on these matters in the House. I regret that I cannot associate myself with his wholesale attack on company car ownership. The purpose of the Bill is not to make life difficult for company car owners but to achieve equity between those who draw their income in cash and those who draw income in substantial benefit through a company car. That is the sole purpose of the Bill. It has no other.

Mr. Nicholas Brown: The Minister's last point is fair. The Labour party shares those objectives.

Miss Widdecombe: It is because there is so much cross-party agreement on the Bill that we can deal with it in one day, a point raised by the hon. Member for Nottingham, North.
The provisions will not be brought into effect tomorrow. There will be a long period of detailed consultation about the administrative aspects of the Bill.
What we are doing is very fair and straight in regard to taxation. If the car industry was handing the money to its employees in straightforward salary income rather than by company cars, it would have to pay the national insurance contributions.

Mr. Couchman: My hon. Friend talks about the car industry giving up the money. The Bill has nothing to do with the car industry. It will affect every employer, whatever his business, be it service or manufacturing, who provides company cars for employees who earn more than £8,500 and who allows them to use the cars privately.

Miss Widdecombe: That is absolutely true. My reference to the car industry was a slip. It has been so widely discussed in the debate that the two have almost become linked in my mind. My hon. Friend is right: the Bill will affect all employers, and what I have said applies to all employers. Any employer who hands out cash rather than a company car would at present have to pay a national insurance contribution, so there is no reason why he should not pay a contribution on the company car.
We have also heard that the Bill will have a very bad effect on the entire British car industry because, if people have a choice, they will buy foreign cars. I bought my own car, and I bought British. My hon. Friend the Member for Fylde (Mr. Jack) tells me that he bought British. Why is there an assumption that, if people have to buy their own cars, they will buy foreign cars?

Mr. John Carlisle: My hon. Friend is being unfair. I am afraid that she is speaking from ignorance. It is not an assumption. Those of us who are in the trade could give her figures, if she wanted them, which would prove that those who are handed the money tend to buy foreign cars—for exactly the reasons which my hon. Friend the Member for Birmingham, Northfield (Mr. King) has given. If my hon. Friend were sure of her facts, I would believe her, but she is on dangerous ground in talking from a brief that does not have the facts. Sadly, the reality is that people buy foreign cars, not British cars.

Miss Widdecombe: All I was challenging was the assumption that, if people had to buy their own cars rather than company cars, they would automatically choose foreign cars. There are fleets of foreign cars, and the purchase of such cars is not confined to the private buyer.

Mr. Wilkinson: If an employer wishes to provide an employee with a car that will be needed for the business, and if that employee has to buy the car out of his after-tax personal income, the employer will have to pay him much more than the cost of providing him with a car to do his job. That is an additional burden, and anything that discourages employers from providing company cars, such as the necessity to pay national insurance on that so-called benefit, is thoroughly adverse and negative.

Miss Widdecombe: rose——

Mr. Deputy Speaker (Mr. Harold Walker): Order. May I ask the hon. Lady not to turn her back on the Chair when she replies to her hon. Friend?

Miss Widdecombe: I apologise, Mr. Deputy Speaker; I stand corrected, facing the right way round.
The Bill's main thrust is exactly what my hon. Friend says: by providing a company car instead of salary, thus avoiding liability to national insurance contributions, the employer, and to a lesser extent the employee, will benefit. That is what we are trying to control.
According to Inland Revenue figures, two thirds of company cars travel more than 2,500 miles per year. That means that tools-of-trade cars, those covering between 2,500 and 18,000 miles per year, make up a large proportion of the total. We are trying to make it easier for those who use their cars as tools of trade to be able validly to do so, as opposed to those who use such cars purely as a perk. Clearly, cars which cover fewer than 2,500 miles a year are being used as perks.
The hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) asked where the burden would fall most heavily. A director with a new car costing, say, £25,000 who covers fewer than 2,500 business miles a year would have a scale charge for the car of £8,250, and free fuel would be worth £900. The total contribution liability would be £950. A typical sales representative covering more than 18,000 business miles a year in a car costing less than £19,250 and with an engine capacity of less than 1400 cc would have a total liability of only £130. Therefore, there is a marked distinction between the burden falling on those who clearly use their cars for less than business purposes and those who use them a great deal.
I shall not address the issue which will be debated in Committee but which was mentioned on Second Reading about those who have a small private mileage. The national travel survey shows that those with tools-of-trade cars covering more than 18,000 miles a year have an average private mileage of 8,600 per year. That is substantial. The number of people affected who have a one or two-mile drive home and to work will be minimal. That will be addressed at greater length in Committee.
The Bill does not seek to clobber the car industry or to make life difficult for employers. The administrative

burden for them will be a great deal less. The Bill simply seeks to make sure that the same rules apply to those who take their income in cash as to those who take their income in kind.
My hon. Friend the Member for Ruislip-Northwood asked whether I understood clause 1(6). It is very simple, and reflects the Inland Revenue rule about the availability of a car for any period of 30 days. If my hon. Friend had gone to the Vote Office and obtained the notes on clauses, he could have informed himself about that and would not have had to ask me.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Committee of the whole House—[Mr. Neil Hamilton.]

Further proceedings on the Bill stood postponed, pursuant to Order [3 May].

Orders of the Day — SOCIAL SECURITY (CONTRIBUTIONS) BILL [MONEY]

Queen's Recommendation having been signified—

Resolved,
That, for the purposes of any Act resulting from the Social Security (Contributions) Bill, it is expedient to authorise the payment out of money provided by Parliament of any increase attributable to the provisions of the Act in the sums payable out of such money under any other Act.—[Mr. Neil Hamilton.]

Orders of the Day — SOCIAL SECURITY (CONTRIBUTIONS) BILL [WAYS AND MEANS]

Resolved,
That, for the purposes of any Act resulting from the Social Security (Contributions) Bill, it is expedient to authorise any increase attributable to the provisions of the Act in the sums which—
(a) under the Social Security Act 1975 are to be taken as paid towards the cost of the National Health Service in Great Britain; or
(b) under that Act are to be paid out of the National Insurance Fund into the Consolidated Fund in respect of administrative expenses.—[Mr. Neil Hamilton.]

Orders of the Day — Social Security (Contributions) Bill

Considered in Committee.

[MR. HAROLD WALKER in the Chair]

Clause 1

CLASS IA CONTRIBUTIONS

Mr. Nicholas Brown: I beg to move amendment No. 1, in page 2, line 37, at end insert
'; provided that if the person liable to pay the contribution can show that in the tax year the use of the car for the earner's business travel amounted to more than 18,000 miles (or such lower figure as is specified in sub-paragraph (2) of paragraph 3 of Schedule 6 to the Income and Corporation Taxes Act 1988) and also amounted to more than three quarters of the total use of the car in that year by the earner, or any relative of his (as defined in section 417(4) of that Act), then the cash equivalent of the benefit of the car for that year shall be taken to be £1.'.
The amendment seeks a modest reform to what has been a little intemperately described by Conservative Members as a pettifogging little measure. I agree with the hon. Member for Birmingham, Northfield (Mr. King) that it is folly to describe a measure that will bring £500 minion to the Government as pettifogging and little. The extra revenue that the Government hope to gain from the measure will be welcomed by them and by us. The Opposition and the Government do not differ in their objectives on this issue.
The Financial Secretary to the Treasury and other Conservative Members who are in the Chamber have served on the Finance Bill Committee since 1987. They will know that every year when we debate these matters the Government steadily claw back through income tax the advantage to the company car owner. Labour's pre-Budget representations suggested a further move in that direction, although we did not suggest that it should be done by way of the instrument that the Government have chosen—employers' national insurance contributions. However, that method, although different from the one that we propose, is not objectionable to the Opposition and we would not seek to reverse it.
Government policy on this issue over the past four years is broadly right and fair, and is necessitated not only by equity, but by the trading relationships that we have to enjoin with our European partners. In time, pressures by them might have become intolerable if the Government had not moved on this issue. I wonder what would have happened if a Labour Government had travelled in the direction in which this Government have travelled in the past four years.

Mr. John Wilkinson (Ruislip-Northwood): There is not much difference.

Mr. Brown: I take that comment as an attack on the hon. Gentleman's own side rather than as a compliment: to me. I am always willing to receive compliments from Conservative Members, provided that they are offered in the right spirit.
We wish to proceed in the same direction as the Government on this issue, and although we harbour the fear that if we had had to travel this road at the pace which the Government have chosen, which is right, the Government would not have given us the welcome that we are extending to them. If they were in opposition they

would have ensured that the full anger of the automobile industry lobby was directed at the Labour Government. Instead, the Government have to weather that attack themselves. I hope that that remark was not too unworthy of me, but I must also point out that we have always argued for some exemption for those who must have a company car and who do little personal mileage. This will come as no surprise to the Financial Secretary because my hon. Friend the Member for Wrexham (Dr. Marek) has made the same point, in the context of income tax rather than national insurance contributions, on the past three Finance Bills.
I rather agree with the hon. Member for Beaconsfield (Mr. Smith): it is slightly discordant that we should discuss these issues in this forum instead of in Committee on the Finance Bill, but I understand the necessity for that and take no great exception to it.
7 pm
This year I and, I am sure, other hon. Members have received a parliamentary briefing from the CBI which asks:
Are MPs satisfied that there is sufficient distinction made by the Government between cars used as essential tools of the trade and those given as perks?
It is clear that some Conservative Members are not satisfied and the purpose of our modest little amendment is to give them some encouragement.
The amendment is specific; it does not leave it open to the Government to make regulations, containing, as it does, the necessary regulations within it. It deals with people who use company cars exclusively on business, not for purposes about which there may be some argument, and who drive them more than 18,000 miles a year—a fairly high mileage. It seems to us likely that such a person would be sick of the sight of the car after 18,000 miles and would not regard any remaining use of it for personal reasons as much of a pleasure. The Minister touched on that point at the end of Second Reading. However, if such a person does not take that attitude, enjoys the use of the car and does a high mileage in it—the Minister referred to an average of 8,000 miles, a figure with which I have no quarrel—of course the car is a perk and the perk element should rightly be taxed.
So we set a threshold. We stipulate that in order for the employer not to be taxed on a company car as an employee's perk it should not be used for private reasons for more than a quarter of the total annual mileage. If someone, therefore, has used a car for more than the 18,000 threshold, we say that he should not have used it for personal reasons for more than about 4,000 miles. That is a clear personal-use threshold beyond which a person's employer would enter the charge bracket.
As the Minister said, a majority may not fall into that category initially, but we think that the pattern might change if the amendment were accepted, and that could be beneficial. People might think again about whether it was advantageous to use a car instead of public transport. They might think again about whether the casual use of the car was really justified. In any event, it is surely right to provide for people who are forced to have a car because of their jobs and who do not enjoy using it much for private purposes.
I realise that the thrust of the legislation is not particularly directed at employees this year; it is intended more as a disincentive to discourage employers from providing company cars in the first place. But our


amendment does not deal with that. It covers circumstances when cars must be given and are not much used for private purposes, and when the Government require the clawback.
I know that there is a scale which the Minister may argue deals with our point, but we think that in the narrow circumstances that we outline—in what is called the "district nurse" case—it would be right to make an exception, and that is the purpose of the amendment.

The Minister for Social Security and Disabled People (Mr. Nicholas Scott): I shall respond briefly, but I hope equally persuasively, and try to dissuade the hon. Member for Newcastle upon Tyne, East (Mr. Brown) from pressing his amendment. He said that there was no disagreement between us about the main thrust of the Bill. When he spoke of our travelling in the same direction, I was reminded of the late lamented lain Macleod who, referring to Enoch Powell, said, "I travel on the same train but I like to get off before the train hits the buffers." There may be something in that.
I am somewhat surprised by the amendment, although it was presented with characteristic good humour by the hon. Member for Newcastle upon Tyne, East. In the Bill, we seek to ensure that cars doing more than 18,000 miles a year which verge on being tools of the trade but which are used for personal reasons for several thousand miles a year, and which are provided free of charge to a private individual, are covered. I emphasise that if a car is provided exclusively for business purposes and no private mileage is run up on it, no charge will arise; but on reflection, the hon. Gentleman may realise that he is going a bit far by suggesting that cars with mileages of more than 18,000—they could still be used for several thousand private miles provided, in effect, by the employer—should be wholly exempt or should make a peppercorn payment, as suggested by the amendment. That would be wrong.
We shall of course keep all this under review once the Bill is implemented, but I cannot advise the Committee to support the amendment because it would enable employers to escape contribution liability even though their employees were allowed to use their cars for quite large private mileages. I believe that employers should pay contributions on this sort of mileage just as if they had remunerated their employees in cash. The charge is reduced by 50 per cent. after 18,000 miles, but to reduce it to a peppercorn would be outwith the spirit of the measure, and I urge the Committee not to accept the amendment.

Mr. Nicholas Brown: I was rather hoping for some support from Conservative Back Benchers—perhaps one of the more likely places where I might look for support. I admit that this argument is taking place only at the margins, but, given the comments of some Conservative Back Benchers earlier, I thought that the amendment might find some favour with them.
Having failed to stir up any trouble for the Minister, I suppose that I ought to be grateful for his offer to keep the matter under consideration. This is a new move towards dealing with cars as a perk. This is year one of the approach that the Government are adopting, and I welcome the Minister's promise to return to the matter later if the anomaly with which the amendment deals is shown to be one that needs attention.
I accept the Minister's remarks in the spirit in which they were made, and in those circumstances I can do no other than beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

Mr. Tim Smith: As my hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) has said, this is an extremely complicated clause. It would be helpful if the Minister explained some of its subsections. Subsection (5) inserts into the Social Security Act 1975 new section 4A, subsection (2)(b) of which provides that class 1A contributions are payable by,
if no such contribution is payable in relation to a relevant payment of earnings in the tax year, the person who would be liable but for subsection (4)(2)(b) above to pay a secondary Class 1 contribution".
The notes on clauses say that that refers to a situation in which
no payments were due because the earner's earnings were below the lowest earnings limit.
The suggestion there is that the earnings were very low indeed. In fact, the lower earnings limit is about £43 a week.

Mr. Scott: It is £52.

Mr. Smith: Very well, £52. I do not see how the employer of a person earning less than £52 a week would be liable to pay national insurance contributions in respect of a car. Indeed, it would be rather unusual for someone earning such a figure to be provided with a company car. However, those appear to be the circumstances to which this clause refers.
Subsection (8) of the new section 4A says:
A person shall be liable to pay different Class 1A contributions in respect of different earners, different cars and different tax years.
The notes on clauses say:
Subsection (8) provides that a person shall be liable to pay different Class 1A contributions in respect of different earners, different cars and different tax years.
The notes on clauses simply repeat the contents of the subsection. That is hardly a helpful way of explaining its meaning. In my view, this subsection is redundant. Surely it is obvious that there will be different contributions, depending on how much people earn, the type of cars they have, and the tax year involved. What is the need for the subsection?
Subsection (9) says:
Regulations may provide—
(a) for persons to be excepted …;
(b) for reducing Class IA contributions".
Can my right hon. Friend tell me who will be excepted from the payment of contributions, and in which cases there will be reduced contributions?

Mr. Wilkinson: My right hon. Friend, in reply to the hon. Member for Newcastle upon Tyne, East (Mr. Brown), who moved the amendment, was elegantly more socialist than the socialists. I should like to refer to the reply of my hon. Friend the Parliamentary Under-Secretary of State to a question that I put to her. I asked her to explain in simple language the exact meaning of subsection (6). It has to be remembered that we are passing legislation that must be comprehensible to the ordinary man or woman in the street. Members of the public, unlike Ministers and other Members of Parliament, are not provided with notes on clauses.
Can my right hon. Friend explain why Her Majesty's Government are relying on the age-old formula whereby employees earning more than £8,500 shall incur liability for their companies to national insurance contributions? This applies also to directors. As I pointed out in my Second Reading speech, there are directors who earn very small salaries, if any at all. Often, in the case of a small company, a director's salary is a few hundred or a few thousand pounds—certainly less than £8,500. What is the logic in providing that an employee earning less than £8,500 per annum will not incur for his company liability to national insurance contributions on a company car, but that a director, by virtue of his office, shall incur that liability for his company? I know that the argument is a historic one—previous usage and the system for scale charges. That is the precedent to which we are working, but it makes very little sense, particularly as company directors have the full statutory obligations and the responsibility inherent in their office, whereas employees have not. In my view, there should be some mitigation.

Mr. James Couchman: I did not intend to take part in this debate, but it occurs to me that my hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) is quite right to point out that some directors who have company cars may not reach the lower threshold for class 1 contributions. That may well be the answer to the first query of my hon. Friend the Member for Beaconsfield (Mr. Smith). What is the position of directors of companies limited by guarantee? Many charities are in that category. What imposition will there be on their directors, particularly if their salaries are below £8,500?

Mr. Scott: I shall seek to address the detailed, but important, points that have been raised.
This is a complicated Bill, but, as my hon. Friend the Parliamentary Under-Secretary has said, we shall conduct wide consultations with employers to ensure that the guidance issued clarifies the whole situation to the greatest possible extent. The figure of £8,500 was chosen for the threshold because it is the same as the Inland Revenue's figure. We are anxious to make sure that the procedures for the collection of these charges are related as closely as possible to those used by the Inland Revenue authorities, so that there will be no further complications for employers.
My hon. Friend the Member for Beaconsfield (Mr. Smith) raised the question of the £8,500 limit. That figure includes not just earnings but any benefits in kind. There has been mention of the position of directors. It would be possible for someone in control of a company so to manipulate the balance of his salary against benefits in kind as to evade proper charges. In this regard, what we propose is realistic and sensible. Full-time working directors, or directors of charities or other such bodies or officers of committees of unincorporated bodies or non-profit-making concerns who are treated as directors will be excluded from the scale charges where they have no

personal stake in the operation of the enterprise or organisation. I hope that that will reassure my hon. Friend the Member for Gillingham (Mr. Couchman).
In respect of subsection (8), I reiterate that we are anxious to ensure that our arrangements are in most cases identical to those of the Inland Revenue authorities. That is why subsection (8) is there.
The concessions in subsection (9) reflect the extra statutory concessions provided by the Inland Revenue. We are not able to do that on an extra-statutory basis; we are advised that we have to do it by regulation. That is why we are replicating in the regulations that will flow from the Bill the extra-statutory concessions that are provided by the Inland Revenue. Thus, an employee provided with a second car for a family member, typically his or her spouse, faces two scale charges, and the second is increased by 50 per cent. But there are concessions where the family member is also an employee of the company. The rules are fairly complicated and, if it would help, I would be happy to write to my hon. Friend the Member for Beaconsfield (Mr. Smith) and perhaps place a copy of my reply in the Library, because it is a rather convoluted argument to carry through. This is widely practised by the Inland Revenue and, I think, broadly accepted as a fair practice. I will make sure that those who are interested are made aware of the details.

Question put and agreed to.

Clause 1 ordered to stand part of the Bill.

Clauses 2 to 6 ordered to stand part of the Bill.

Bill reported, without amendment.

Motion made, and Question proposed, That the Bill be now read the Third time.—[Mr. Scott.]

Mr. Graham Allen: I hope that Ministers have noted the generous co-operation that has been extended on this measure. I hope that that co-operation will be reciprocated and that a large number of Bills will be dealt with similarly when a Labour Government comes to power. I am sure that that opportunity will arise very shortly. I am thinking in particular of uprating provisions for pensions and child benefit, which I hope will be among the first items placed before the House.
This Bill seeks to redress the imbalance between national insurance contributions on pay and national insurance contributions on the company car, a payment in kind. It is a matter which will require further review and examination by the incoming Labour Government. We will not oppose the measure.

Question put and agreed to.

Bill accordingly read the Third time, and passed.

ENVIRONMENT

Ordered,
That Dr. Kim Howells be discharged from the Environment Committee and Mr. John Battle be added to the Committee.—[Mr. Dixon, on behalf of the Committee of Selection.]

Rivers (Hampshire)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Wood.]

Mr. Michael Colvin: I am most grateful to Mr. Speaker for selecting my subject of Hampshire's rivers for the Adjournment debate this evening.
The "compleat angler" can fish all the year round; for someone, somewhere, fish are always in season. But on the chalk streams of Hampshire, it is the coming of mid-May and the hatching of the mayfly that herald the halcyon days ahead. So May is a most appropriate month in which to debate this subject.
Of all the chalk rivers in Hampshire, and probably in the south of England, the Test has long been queen. I am fortunate in having in my constituency its lower reaches, where the salmon join—or perhaps I should say used to join—the trout. Upstream is Stockbridge, the capital of chalk stream dry-fly fishing, mecca for fishermen and headquarters of the famous Houghton club. It should all be a scene of tranquillity, beauty and fishermen's yarns. Instead, the Houghton club is at present ahum with tales that would make Frederick Halford, the father of dry fly fishing, turn in his grave.
One hundred years ago, Halford published his "Dry-fly Fishing in Theory and Practice", in which he said:
Of all circumstances most usually credited with exercising an influence over an angler's sport, the state of the weather is the predominant one.
We certainly have to thank the weather for having brought to a head the problems and anxieties that have been besetting Hampshire's rivers and fishermen for the last few years. Three unusually dry years, 1988–90, and in particular the March to December period in 1990, which may have been unequalled for dryness since 1921, have literally caused rivers to disappear.
Of the many rivers in Hampshire, it is the chalk streams, the Test, lichen and Meon, that most vividly illustrate the problems. The Meon in east Hampshire and the Wallop brook and Bourne rivulet, both feeding the River Test, have been suffering from abnormally low flows, because too much water is being taken from boreholes situated in their valleys. Unless something is done urgently to improve water flows, the term "dry fly fishing" may soon take on a whole new meaning.
The Water Act 1989 established the National Rivers Authority and gave it powers to conserve, redistribute or otherwise augment water resources and secure their proper use. The NRA replaced the regional water authorities set up in 1974, which were both judge and jury over the management—or perhaps one should say, mismanagement—of our water resources. The NRA could not have come into being at a more important time, and it responded quickly to the challenges awaiting it on 1 September 1989 when it assumed authority over our rivers.
Far from having the NRA chairman, Lord Crickhowell, in the stocks at Stockbridge for failing to act, I have to admit that we in the Test valley are now applauding him and the NRA for what they are doing, in co-operation with Southern Water, to remedy the situation that faces us.
Last October, the NRA held a forum for interested groups to discuss all aspects of river management. Then,

last month, it organised a well attended seminar on its scientific research into the dramatic fall in salmon catches. More NRA research is in hand with the Institute of Freshwater Ecology to see what can be done to stop salmon redds, or spawning grounds, silting up. Last week, another seminar was organised jointly by the British Field Sports Society, of which I am the vice-chairman, and the Salmon and Trout Association.
One can spend a lifetime studying statistics, borehole readings, chemical analyses, flow charts and river reports and still not understand a river as well as its keepers or managers, who for centuries have been conserving these national assets.
The fishing rod is not, as Dr. Samuel Johnson suggested, a stick with a hook on one end and a fool on the other. Fishermen and riparian owners perform a key role in ensuring that river management is at a high standard and flows are maintained. Lord Crickhowell has said that the fisheries are one of the best measures of the health of a river.
Concern over our rivers has also been demonstrated by local residents who have nothing to do with fishing. Last year, the Test valley branch of the Council for the Protection of Rural England, of which I am proud to be the founder president, invited the NRA to come and speak on the subject of our disappearing rivers, and there was a record attendance.
It is only comparatively recently that increased per capita consumption and, to a lesser extent, population growth have forced engineers to take more water from the chalk, initially without detriment to the ecology; and we are now seeing the first signs that, although rivers are not yet over-abstracted, we may be taking too much water from the wrong places.
When the NRA grants an abstraction licence, it considers whether the water taken will ultimately be removed from the river system and consumed, or will be recycled. Some uses, such as spray irrigation, evaporative cooling or bottling water, are totally consumptive; the water just goes. In the case of inland public water supply, 80 per cent. of the water is returned to the water environment via sewage farms, septic tanks and the like. In coastal areas, waste water goes straight out to sea.
The NRA has made it clear to all abstractors in Hampshire that it will not permit new public water supply or summer consumptive abstraction from the Hampshire chalk. There are no plans at present to revoke existing licences. The NRA usually insists that spray irrigation can be permitted only if the operator can provide a storage reservoir that is filled during the winter heavy rain season. Agriculture is rarely a threat to consumption, because most water is returned via soakaways or controlled discharges to watercourses. The finger of accusation, however, is being pointed at intensive farming near rivers. The banks of Hampshire's rivers used to be bounded by water meadows that acted as a filter. Most of the land is now ploughed to the water's edge. I have even seen some meadows where maize is grown year after year. The intensive use of nitrogen results in more river weed, which further reduces flows and results in rivers silting up. Heavy nitrogen use away from rivers also causes lush growth and thus greater evaporation of water.
The NRA is researching the agricultural problems as part of an appraisal of land use practices in the catchment areas. However, in the meantime, the Government should reconsider the regime for grant aid to farmers in


environmentally sensitive areas, such as the mid-Test. The grants are not adequate to compensate farmers—who are already reeling under other economic pressures—for reducing their agricultural output and thus protecting their water environment.
What is being done to protect Hampshire's rivers? There is a growing public realisation that water is a scarce and precious resource, which should be used wisely in drought years. There is now demand management, and licence monitoring is the rule rather than the exception. We need better leakage control. Some 25 per cent. of water is lost through leaks. We need a charging policy that encourages wise use of water. The CPRE wants national metering of water to be introduced, which could be a starter.
We should restrict development. I am pleased to note that the southern region NRA has an input into SERPLAN—the south-eastern regional plan, but is drawing the Minister's attention to the impact on our water resources of the problems caused by overdevelopment enough? Surely a veto over planning applications would be better.
The flows of rivers could be boosted by pumping water into them from correctly placed boreholes. Leaking riverbeds can be lined. Treated water can be returned to the rivers, and existing licences can be revoked. If we resorted to the last of those measures to resite boreholes, the NRA would have to compensate the water user for the high cost of developing the alternative source. Who pays? Hampshire has several boreholes that directly affect water flows. One borehole is at Broughton, on the Wallop, a tributary of the Test. One is at Totford, at the source of the Itchen, and there are others close to the Meon and to the Hamble.
Although the NRA has the necessary finance for its many investigations, a question remains over the funding of expensive remedies for confirmed problems under the existing charging or grant-in-aid arrangements. I should like confirmation from my hon. Friend the Minister that the Government will provide the NRA with the money required to carry out essential remedial work that involves licence revocation.
Some costs cannot be borne by the NRA, such as the provision of reservoirs. A reservoir is planned by Southern Water at Totton in my constituency, where the waterworks have supplied most of the additional consumption in the area in recent years. New reservoirs at Totton, which is an ideal place, could store winter river water just before it reaches the sea, but would have no effect on upstream flows or fishing. I hope that the reservoirs will receive planning approval from New Forest district council and from Test Valley borough council. The reservoirs would provide a supplement and would mean that Southern Water would not have to take more water from the river as summer peak demand grows. They would also provide a reserve if pollution occurred in the lower reaches of the Test or in the Solent. I should like the NRA to carry out a study for a national water grid. There may be many problems to overcome, not least finance, and it may be a non-starter for that reason, but it should be investigated.
I have described some of the actions being taken. There are others that, in my view, and in the view of my hon. Friend the Member for Hampshire, North-West (Sir D. Mitchell), whom I am delighted to see in the Chamber, who, I hope, will join in the debate and through whose

constituency the river Test flows, need to be carried out to preserve one of England's most priceless natural resources in the same way, as Lord Crickhowell has said, as
a great work of art or music
must be maintained.
I look forward to hearing the Minister's answers. My constituents very much welcomed the visit today to Romsey of my hon. Friend the Minister for the Environment and Countryside, who answered many questions from my constituents about the Test. I have left it to my hon. Friend to answer my questions this evening. I look forward very much to his answers to my questions, which have as much to do with Mrs. Colvin's washing machine as with trying to catch a trout on a day's fishing. I hope that someone will offer Mr. Speaker such a trout in return for his selecting my subject for this evening's debate.

Mr. Cranley Onslow: I am grateful for the opportunity to participate in a debate on a Hampshire matter. I support everything that my hon. Friend the Member for Romsey and Waterside (Mr. Colvin) said. Like him, I am an interested angler. I am on the councils of the Salmon and Trout Association and of the Anglers Co-operative Association. I am also the chairman of the fisheries committee of the British Field Sports Society. I must declare all those interests, although I am angler first and foremost. Above all, I want rivers to be in a fit condition for fish to live in them and for anglers to fish in them. The sad fact is that, in far too many rivers in Hampshire and elsewhere, those conditions are no longer met. The threat to water levels and to water resources seems to many of us to be getting steadily worse.
I know that many dedicated anglers on the Test and on the Itchen can no longer bring themselves to go fishing because they believe that those rivers are dead. They are full of rainbow trout rather than native brown trout, their levels are low and the amount of weed in the rivers is seriously down. They are not the chalk streams which our fathers and grandfathers knew, and which some of us also knew. The opportunity to dwell on some of the reasons for that change is welcome.
It would be wrong if I left the House with the impression that we are discussing a purely Hampshire problem. From my experience and that of many friends, I know that there are problems with rivers in Berkshire, such as the Pang, with rivers in Kent, such as the Darent and the Stour, with chalk streams in East Anglia and with the West beck in Yorkshire, which is a famous chalk stream where a famous fishing club has been established for many years. There simply is not enough water for fish to live in those rivers. That state of affairs is no credit to the water industry.
I join my hon. Friend the Member for Romsey and Waterside in his tribute to the work of the National Rivers Authority. I know how close an interest the chairman of that authority, Lord Crickhowell, takes in the problem. It was the theme of an effective inaugural lecture that he gave at Fishmongers hall last year, which was well received by everyone who is interested in this important subject.
The NRA and other defenders of our rivers need more help. Some of that assistance must come from the Government in legislative or financial form. There was welcome news in today's newspapers that there is to be a programme to line the beds of 20 chalk streams to prevent


water loss through leakage, although the cost is pretty intimidating. However, the Government can still do more to limit the unnecessary loss of water from our rivers.
An analysis of the figures shows that in Hampshire and elsewhere the total theoretical take-up of the abstraction licences that have already been granted in some cases exceeds the flow of all the rivers in an area. A terrifying quantity could, in theory, be extracted from rivers and boreholes. If that ever happens, we shall have lost the battle entirely. We must study the need to revoke abstraction licences not just for farming, but for other purposes as well.
There is still scope for stricter controls on planning permission relating to the amount of water available in the area concerned. I would like to see regulations if such controls cannot be embodied in the Planning and Compensation Bill currently before the House. There is room in secondary legislation for a stipulation that the NRA must always be consulted by a planning authority which has a major development application before it, whether that be residential or industrial. If the NRA believes that adequate water resources are not likely to be available for that development, that should constitute a veto. I shall be interested to hear what my hon. Friend the Minister has to say about that. He may argue that the NRA does not yet have the technical resources to make such judgments. That may be a convincing argument, but it does not mean that the NRA should not be encouraged to develop those resources and, as soon as it gets its act together, it should have the power to exercise such controls over the increased use of water resources.
I also enter a note of caution about water recycling. My hon. Friend the Member for Romsey and Waterside accurately described the damaging effects of spray irrigation. None of the water sprayed on a field ever returns to a river from which it is abstracted. As I suggested to my right hon. Friend the Minister of Agriculture, Fisheries and Food earlier today, more attention should be paid to encouraging farmers to impound excess winter rainfall and use that as a source of summer spray irrigation instead of simply pumping the water out of rivers. That practice is all too commonplace in Hampshire and in Devon and there are well-documented examples of rivers being depleted in that way.
Too much reliance is placed on the argument that water abstraction from the bottom of a river can be recycled by being pumped to the top, used and then returned to the river and we must still recognise that that will not be the same natural water as would have entered the river if the boreholes, springs and other sources upon which it had always relied had remained unimpaired. There is a danger in the clever device of recycling water from the bottom of a river to the top which must be explored.
I hope that I have not pressed my point too much in the time available. My hon. Friend the Member for Hampshire, North-West (Sir D. Mitchell) is aware that this is a most important subject and I am grateful to my hon. Friend the Member for Romsey and Waterside for raising the matter this evening. I look forward to a positive response from my hon. Friend the Minister.

Sir David Mitchell: I congratulate my hon. Friend the Member for Romsey and Waterside (Mr. Colvin) on raising this important subject for debate. He expressed considerable concern about the River Test, which is important to his constituency. However, as he rightly said, it flows through my constituency first and several of its subsidiaries, such as the Dever and Wallop brook, are important to the environment in my constituency. I saw Wallop brook at Broughton at the weekend and I can confirm—I confirmed it again today by telephone—that it is now at full flood and nearly level with the top of the bank. That is highly satisfactory. However, that apparently highly satisfactory situation conceals the real concern that the aquifers underneath are getting lower year by year.
Last year Wallop brook at Broughton ran dry for the second year running. It has not run dry for two successive years since at least 1921. Although the water level above Broughton was severely constrained which resulted in a good deal of misfortune, the river dried out entirely below Broughton. That was clearly associated with the pumping from the aquifers at Broughton.
The problem is that the water company is pumping within the terms of its licence. It is not even pumping at the maximum amount that the licence permits it to draw from the borehole at Broughton. The water company should draw less water from Broughton and make up the amount by drawing water further down at Horsebridge where it can almost certainly take more water without causing the rivers to dry up.
Who will pay Southern Water to pump more expensive water from that pumping station than from Broughton? There may even be a strong case for laying additional pipelines or reopening disused pipelines between Horsebridge and Broughton to pump water back up to the Broughton source.
It is clear that in many cases licences were granted many years ago—sometimes before the war—and in wholly different circumstances for a given level of abstraction. Abstracting at those levels in current circumstances, with our lower aquifers, produces results different from those expected when the original licences were granted. I hope that my hon. Friend the Minister will consider the pertinent matters of whether we can revoke or partially revoke licences, who will compensate water companies and where those resources will come from.
I welcome today's announcement in relation to Wallop brook of a combination of partial revocation of licence, the augmentation of river flow and river lining at a cost of £3 million. I am fascinated to know where that money will come from.
Can my hon. Friend the Minister give any news about progress in trying to reduce water loss by leakage? It is about 25 per cent. Most people are thrown back on their haunches when they learn that 25 per cent. of the water that has been abstracted and is being pumped into the water systems of our towns and villages is lost by leakage. Apart from everything else, we need much more research, investment and work in identifying leakages and stopping them much earlier than at present.

The Parliamentary Under-Secretary of State for the Environment (Mr. Tony Baldry): I am grateful to my hon. Friend the Member for Romsey and Waterside (Mr. Colvin) for raising the important subject of vanishing rivers. The whole House will welcome his contribution and those of my right hon. Friend the Member for Woking (Mr. Onslow) and my hon. Friend the Member for Hampshire, North-West (Sir D. Mitchell). Their contributions have been extremely valuable. The Government appreciate their concerns, as was evidenced by the visit of my hon. Friend the Minister for the Environment and Countryside to Hampshire only today.
The subject of vanishing rivers is, understandably, hardly far from the news at the moment. Despite some welcome rain in the south-east in the past couple of weeks, there are continuing worries about water shortages this summer. The chalk streams of Hampshire and the south are well known among anglers and there is great concern about their condition, and that concern has been well amplified this evening. In particular, and understandably, there is concern about the steady decline in salmon catches in recent years. My hon. Friend the Member for Romsey and Waterside and other right hon. and hon. Friends have suggested a number of ways in which they believe that water levels in chalk streams can be safeguarded for the future. Before I comment on their suggestions, I hope that it may be of benefit if I say a little about the various issues that are affecting chalk streams generally and in Hampshire in particular. I hope in the process to dispel a few myths.
First, water quality is clearly an important factor in maintaining a river, and particularly in safeguarding its fisheries. The water quality of chalk streams has been, and continues to be, extremely good. The principal rivers, including the Test and Itchen, are all extensively monitored by the National Rivers Authority and are all well within class 1 of the current national river classification scheme—that is, they are of "good" quality—and with an excellent diversity and abundance of species present. The majority of their length is well within class la, the top quality class.
As for quantity, rather than quality, it is certainly the case that southern England has experienced a prolonged dry spell over the past three years, and groundwater levels are now well below normal in parts of the south-east and east. Hampshire, however, is not one of those areas worst affected.
The level of a river and the speed at which it is moving are relevant to fisheries. The long hot summer of 1989 is believed to have stimulated the growth of algae, which in turn tend to smother the weeds in a river and increase silt loadings. Those effects, combined with heavy rain the following winter, conspired to scour out much of the weed growth, so that last summer the river flowed over an almost weed-free bed, resulting in low levels, despite the flow holding up reasonably well, but a higher than normal velocity, and thus higher levels of silt.
Hampshire chalk streams do not, as a whole, suffer badly from over-abstraction. Certainly in the Test, the vast majority of abstractions from the river are non-consumptive. That is, the water is "borrowed" and returned, more or less directly, back to the river. Only 2 per cent. of the average flow is consumed after abstraction. Despite some short-term fluctuations, there does not

appear to be any long-term trend of increase in either licensed or actual volumes abstracted. However, despite those general comments, the NRA recognises that some localised problems are caused by over-abstraction. I shall say more about that in a moment.
That brings me to the role of the NRA. It will be very grateful for the supportive comments of my hon. Friend the Member for Romsey and Waterside. The establishment of the NRA has provided an unprecedented opportunity not just in Hampshire but across the whole country for a new and thorough appraisal of the issues affecting the condition of our rivers. The NRA's responsibilities encompass a range of issues—for example, water resources as well as pollution control, and fisheries as well as nature conservation. I have already commented that my hon. Friend has recognised the N RA's work.
We set up the NRA as a tough environmental regulator and there is growing acceptance among those concerned, including environmental bodies that had hitherto been sceptical, that it is succeeding as a tough environmental regulator. Let me outline what the NRA is doing in Hampshire and elsewhere.
First, it has taken action to help Hampshire's salmon fisheries. While most trout fisheries reported an excellent season last year, salmon catches have been declining for some years. Reference has been made to recent local seminars. My hon. Friend the Member for Romsey and Waterside will therefore be aware of the NRA's view that river management appears to hold the answer. Salmon populations are known to depend critically on an adequate supply of clean gravel beds in which to lay their eggs. Historically, riparian owners' keepers regularly raked river gravels to ensure that they were clean, free from silt and ready for the spawning season. That practice has slipped into abeyance in recent years, and that appears to be a major factor in the decline in the fisheries.
The NRA has been seeking to tackle that problem in a number of ways. Research has confirmed that river gravels are not as productive for spawning salmon as might be expected. A programme for mechanically raking gravels is being undertaken and studies are being carried out into sediment movement and into weed growth and management, including the advantages of reinstating programmes of weed cutting in the autumn.
The NRA has also constructed a number of new fish passes on the Test to ensure that incoming salmon can reach their spawning grounds freely. It is taking steps to restock the river with artificially reared local salmon. It has also installed electronic fish counters and radio tagging equipment to study fish movements and spawning behaviour. The NRA is taking a number of positive steps to study causes and to restore the salmon fisheries.
Secondly, while the Test itself is not believed to be suffering from the effects of over-abstraction, there are rivers in Hampshire that are affected. Last year, the NRA identified 20 priority rivers in which low flows were believed to be the result of over-abstraction rather than simply low rainfall, and the NRA thus embarked on a programme of urgent studies. Yesterday, the NRA announced its programme for dealing with the first set of priority rivers. A number of those that have been mentioned are included in that list—for example, Wallop brook, one of the tributaries of the Test near Stockbridge. My hon. Friends have mentioned others, including the Darent and the Pang in Berkshire, as well as a number of other rivers in the south which the NRA has recognised


require action. Solutions are now being investigated, including a combination of partial revocation of abstraction licences, augmentation of flows and river bed lining. The NRA is continuing to investigate possible solutions for a further list of rivers suffering detrimental reductions in flows. They include the Bourne rivulet, which is another tributary of the Test, the Meon and the Hamble.
The NRA recognises that where problems caused by over-abstraction exist, there are very rarely any quick or simple solutions. I am, however, impressed by the NRA's determination to get to grips as quickly as possible with such difficulties and I commend the progress that it is making.
Although the NRA has been looking so far at solutions to specific problem cases, we are all alive to the need for longer-term solutions. Abstractions must, of course, be properly managed and the NRA has a full range of powers not only to control the issue of new abstraction licences, but to amend or to revoke any existing licences. My hon. Friends have asked whether the NRA is properly resourced to use those powers. The authority's costs are ultimately recouped from abstractors via abstraction licence charges. To the extent that capital spending is necessary and justified, the NRA has access to initial funding from the abstraction charges scheme. I have no reason to suppose that shortage of capital funds is a constraint on the authority's ability to carry out its functions properly.

Sir David Mitchell: Does that expenditure availability also apply to compensation for reduction of extraction from an existing licence which is reduced?

Mr. Baldry: The costs that the NRA can recoup from abstractors via abstraction licence charges are moneys that can then be used for practical spending. Clearly, there may be occasions when, under its statutory responsibilities, the NRA will have a duty to consider whether it should amend or revoke any existing licences. In such circumstances, compensation is clearly a matter for the NRA. I shall have to take advice on my hon. Friend's specific point about whether it can pay compensation from the abstraction charges scheme. I hope that I shall be able to help my hon. Friend before the end of my speech.
As for its local abstraction policy, I can confirm that the NRA's approach is for major abstractions from Hampshire rivers to be taken from as close as possible to the tidal limit in order to preserve natural flows in the middle and upper reaches. I can also confirm that, certainly for the Test, the NRA does not generally intend to permit new, "consumptive" summer abstractions, requiring instead that sufficient bankside winter storage should be provided together with prescribed minimum flows.
My hon. Friends have referred to the pressures on water resources caused by new developments. The level of development in Hampshire is, in the first instance, a matter for the county council to consider in drawing up its structure plan. I should certainly expect the NRA and local water companies to make an important input into this process so that a proper strategic balance can be struck between development and conservation. The Secretary of State will, of course, need to consider any objections made to the structure plan.
With due respect to my right hon. Friend the Member for Woking, I cannot agree that the NRA should have a veto over planned development proposals. Although careful account must always be taken of the expert advice that is provided by the NRA, the final judgment must be that of the local planning authority.

Mr. Onslow: I should be content with that proposition were it not for the fact that there is absolutely no obligation on the planning authority to take any notice of the input of the NRA. The NRA does not know until very late in the day whether its recommendations have been acceded to and taken seriously. As long as that is the case, I am not persuaded that there is a satisfactory requirement to take the availability of water resources into account. I shall require further evidence, in addition to that which my hon. Friend has been able to give so far, that the need for a veto is not great.

Mr. Baldry: I hear what my hon. Friend says. Clearly, it would sensible if local planning authorities were to take into account the NRA's views when determining planning applications. Any instances or examples where my right hon. Friend feels that the local planning authorities have failed adequately to take into account the NRA's views must clearly be considered. However, I know of no suggestions that local planning authorities have taken planning decisions in disregard of the views that have been put forward by the NRA.

Mr. Onslow: I am sorry to press my hon. Friend on this point, but it is important. If he carries out some research in his Department, it will turn up cases that will show that in more than one instance the advice of the NRA's predecessors about the danger of flooding was not taken into account by the planning authority. Development permission was then granted and the development went ahead, but serious flooding resulted on the developed land. That seems a powerful argument for my case.

Mr. Baldry: My right hon. Friend makes the same point in a different way. I do not know of any example of a local planning authority that can be said to have disregarded the advice that was provided by the NRA. Local planning authorities have to take such advice into account, along with a number of other factors, when determining whether to grant a planning application. If my right hon. Friend knows of specific instances where the advice offered by the NRA has not been adequately or sufficiently taken into account by a local planning authority, they will clearly have to be considered as a matter of general policy. However, at the moment local planning authorities take account of the expert advice provided by the NRA. They often have to take into account a number of varying opinions from different bodies, some statutory and some non-statutory, in making a final planning judgment.
Looking ahead more generally, the NRA is developing an overall water resource strategy for the future. It recently published a first report as part of that work, giving a preliminary demand forecast for each of the water supply companies. The NRA has also commissioned consultants to take a fresh look at strategic water supply options, including a national water grid, more inter-regional transfers, and the prospects for desalination. None of those would provide an inexpensive solution. As my hon. Friend conceded, desalination is energy intensive and the plant involved can be highly intrusive. As water is heavy


and bulky, it is seldom economic to transport it over great distances. However, I am sure that the NRA will consider those issues carefully.
Let me reiterate and answer the question asked by my hon. Friend the Member for Hampshire, North-West. The NRA's resources, to which I have already referred, cover instances where it is necessary to buy out licences. As I hope I have confirmed to the House, I do not believe that the shortage of funds is in any way a constraint on the NRA carrying out necessary activities in relation to the problem of vanishing rivers.

Sir David Mitchell: I warmly welcome what my hon. Friend has just said and I am most grateful to him for having answered the question I asked him in the middle of my speech.

Mr. Baldry: I am grateful to my hon. Friend.
My hon. Friend asked about the actions that can be taken to control the consumption of water. It has been rightly pointed out that water is not an infinite resource. I agree completely. Although I am sure that no one would want to constrain the legitimate uses of water, I suspect that we are all guilty at one time or another of careless or wasteful uses and we can all help to conserve supplies.
My hon. Friend the Member for Hampshire, North-West asked specifically about leakage. Leakage is a problem in all water distribution systems, but it is something to which the water industry is paying ever-increasing attention. The Director-General of Water Services already expects water companies to adopt cost-effective leakage control measures and to minimise charges to customers, and the companies have leakage detection and control programmes designed to minimise losses. For the longer term, the NRA will wish to ensure that leakages are minimised in order to avoid unnecessary abstractions and the development of new resources.
As for charges, there are indications that metering encourages economy and reduces wastage. However, it would be wrong for me to say more, as the director general is currently analysing the responses to a consultation paper on future methods of paying for water and proposes to issue guidelines to the water companies by the end of the year.
Finally, I have been asked about the environmentally sensitive areas scheme, which is, of course, the responsibility of my right hon. Friend the Minister of Agriculture, Fisheries and Food. However, I understand that a review of the scheme is already under way and that, if favourable, consultations with farmers and conservation bodies will follow. I have no doubt that the issues that have been raised this evening will be among those that the review will wish to consider.
This debate is most timely and topical, given the attention following yesterday's announcement by the NRA about how it plans to tackle the problem of low flows caused by over-abstraction in certain rivers. Although Hampshire is by no means as badly affected as other parts of the country, I am pleased that the importance of its chalk streams, chalk streams in general and the fisheries they support has been fully recognised by the NRA in the work that it is carrying out. I hope that I have been able to satisfy my right hon. and hon. Friends that the Government and the NRA are taking the issues seriously and that action is being taken to tackle existing problems.

Gravel Extraction (Buckinghamshire)

Mr. George Walden: I am extremely grateful to have a chance to take part in one of these highly elusive debates—so elusive that one beat of a Whip's heart or one spoonful too many of watercress soup in the Members' Dining Room, and the moment is passed.
I am particularly glad that the debate will be answered by the Under-Secretary of State for the Environment, my hon. Friend the Member for Banbury (Mr. Baldry), and that my hon. Friend the Member for Daventry (Mr. Boswell) is on the Front Bench, because they both share my concern about gravel extraction and all that it involves. They are both neighbours of mine and, although they are constrained in their public utterances by ministerial office, we concert on these matters and I hope to have a sympathetic hearing if only for that reason.
I do not want to be a NIMBY negativist. I want to be positive and constructive, but I must begin by outlining what seems to me to be an unacceptable situation. In huge swathes of north Buckinghamshire people are in danger of having their lives blighted and the countryside is in danger of being irretrievably scarred by the operation of gravel diggers.
Where did we start? It is interesting to look back at a report by Sir Ralph Verney in 1976 which he recalled in a letter published in The Times about a year ago. I shall quote from it because it recalls where we started only a few years ago. Sir Ralph Verney wrote:
the County Council as mineral planning authority should be mindful of the fact that when we planned the building of Milton Keynes, their Committee of which I was Chairman imposed a condition that no permissions should be granted west of the M 1 for gravel extractions for the building of the City. This decision was fully endorsed by the London and Home Counties Regional Planning Conference and there was never any question of County quotas for extraction as has been suggested by the developers.
That is where we started a few years ago. Where are we now?
The village of Chackmore in my constituency is a charming quiet village quite close to Buckinghamshire in the environs of the historic grounds of Stowe. It is incredible to believe that an application was put in for gravel extraction within hundreds of yards of that village. It was fought, but it was only after a campaign in the national press that the application was withdrawn. Not everyone has the pulling power, in terms of media interest, of Stowe school, or the support of the National Trust.
The village of Mursley in my constituency—a tranquil and ancient village—is similarly threatened. Once again, there is a proposal to extract gravel on a huge scale within a few hundred yards of the school, which will destroy the environment of the people who live in the village.
Mr. Kenneth Tucker, the leader of a campaign against the threat to Mursley, is not a nimbyist, but a highly energetic and informed man, who takes this matter extremely seriously and looks beyond the confines of his own village. He has pointed out that gravel extraction so close to that village would lead to dust, traffic, noise and danger to the water sources. There would be consequent damage to the environment of neighbouring villages, notably Drayton Parslow.
Those are two examples, but there are more. The villages of Thornton, Beachampton and Thornborough


are faced with a similar threat. They lie in an especially picturesque stretch of the Ouse valley. To give an example of the complete insensitivity to landscape with which these applications are made, gravel extraction in that area would run against the convent of Thornton which is a retreat and a teaching centre, and is set in a splendid and isolated landscape, as the nature of the convent requires. That is an example of total insensitivity to the lives of local people, and to the nuns, which can creep into applications for gravel extraction.
It is important to remember that places like the Ouse valley are close to the town of Buckingham and to the larger agglomeration of Milton Keynes. Not only the villagers would suffer; so would the inhabitants of those large towns, for whom that area is one of the closest recreation centres.
Other examples affect my constituents. One is at Finmere, which is over the frontier in the constituency of my hon. Friend the Minister. Another is in the village of Passenham, which is in the constituency of my hon. Friend the Member for Daventry, whom I am glad to see here tonight. Any gravel extraction there could affect the lives of my constituents in Stony Stratford.
A sudden pattern of gravel extraction proposals has developed in north Buckinghamshire in recent years, since Sir Ralph Verney pointed out how damaging it would be if that were to happen, partly as a consequence of the contruction of Milton Keynes.
We seem to be caught in a vice on this matter. We seem to be in a position where we have to despoil the countryside to improve the built environment; we have to blight the lives of rural residents to improve urban areas, housing and roads. We seem to be in a position where people who live in urban areas and who might want to seek a little tranquillity in the countryside at the weekend will find dust, noise and gaping holes in the ground in the villages that I have mentioned. It seems to me to be in everyone's interests to re-examine the whole question of extraction of aggregates and the implications for the environment.
The present arrangements appear to be neat and logical. They depend upon a system which reminds me of some of my experiences in Communist countries where I had the mixed fortune to live at one time. Those arrangements are based upon a quota system and upon rather inflexible national planning. One only has to look at the ugly acronyms associated with the process, such as RAWP and SERAWP, to get the feeling that it is an irresistible process which has lost all touch with the lives of ordinary people.
As my hon. Friend the Minister knows better than I, the arrangements depend on co-operation among the minerals industry, local authorities and representatives of the Department of the Environment. There is the south-east regional aggregate working party, the regional aggregate working party and the national co-ordinating group, which is chaired by the Department of the Environment and comprises working party chairmen, representatives of the aggregates industry and other Government Departments. That all sounds neat and immaculate as a piece of planning machinery, but, in practice, it has become completely divorced from the results on the ground. It is all very well to have RAWP and SERAWP

and means of co-ordinating them, but something has gone alarmingly wrong with the whole bureaucratic structure when it ends up in a serious proposal to place a gravel extraction pit next to a school, a convent or Stowe school.
I am not chiding my hon. Friends the Ministers in the Department of the Environment for the situation, as they know, because I have raised the matter in the House before and have had discussions with the Minister, my hon. Friend the Member for Suffolk, South (Mr. Yeo), about it.
The Department of the Environment has been rather forthcoming in reply to my representations. In case it forgets how forthcoming it has been, I shall take this opportunity to remind it.
In his letter of 4 February to me, my hon. Friend the Member for Suffolk, South promised to take increasing account of the possibility of alternative sources of aggregates, in other words of slag and such like, rather than digging it from the ground. I also know that the Department of the Environment has spoken to Mr. Peter Smith, an expert on the subject, who happens to live at Chackmore in my constituency—one can see what a wealth of informed and serious people I am fortunate enough to have in my constituency. I am grateful to the Department of the Environment for listening to what Peter Smith has to say.
On the day of my, sadly abortive, Adjournment debate two days ago, the Department of the Environment, I am sure by coincidence, answered a written question on the subject from my hon. Friend the Member for Hampstead and Highgate (Sir G. Finsberg). In that reply, the Parliamentary Under-Secretary of State for the Environment spoke of the
forecasts of the demand for aggregates for the next 20 years" 
having
been prepared by independent consultants.
He went on:
The Government are publishing the forecasts now so that the environmental implications of the rising demand for aggregates can be fully considered. These are a matter for serious concern. The forecasts do not mean that the demand must be met from new sources of land won aggregates. Nor do they mean that targets are set for production by the minerals industry.
Later, in what was an important statement, the Minister went on:
The Government will expect the industry to make greater use of alternative sources of supply. These include the potential from marine dredged sand and gravel; the greater use of materials such as china clay, sand and colliery minestone; and the increased exploitation of waste and recycled materials including power station ash, blast furnace slag and crushed concrete. We shall also consider the contributions that can be made from coastal super quarries. The Government have research in hand to examine all these options.
At the conclusion of what was an immaculately drafted reply, the Minister said:
Mineral planning authorities should have regard to the statement made by the then Parliamentary Under-Secretary of State. my hon. Friend the Member for Southampton, lichen (Mr. Chope) in July 1989 which made it clear that MPG 6 should be implemented as a matter of priority".—[Official Report, 7 May 1991; Vol. 190, c. 401–2.]
As we know, MPG 6 is the document that is causing the present problem and under which the applications—I have described them as grotesque—have been made in my constituency.
The aggregates industry is literally consuming the country.


Those are not my words. I would not use such fiery rhetoric. They are the words of Dr. John Adams of University College, London in a document entitled "Determined to Dig", which was published this month. I hope that the Government will take serious note of that very serious document, because it shows that the problems that my constituents are encountering will be encountered increasingly across the country. Dr. Adams states in that document:
The principal objective is achieving adequate and steady supplies of aggregates. The second, subordinate, objective is the best balance of the social, environmental and economic costs that must be paid to achieve the first.
He hit the nail on the head there, because that is precisely the imbalance into which we have got ourselves.
Mr. Peter Smith of CAGE—the campaign against gravel extraction—to whom I referred, gets to the heart of what happens to be for me a local problem but which is a much wider national one. After much study of the matter, Mr. Smith believes that the Department of the Environment is in danger of managing the land quarry gravel market to ensure an excess of supply over demand which results in an artificially low price. That is no doubt done with the best of intentions, to support the construction industry, and we appreciate the importance of that industry.
However, Mr. Smith points out that gravel is 40 per cent. cheaper today than it was in 1970. The result is that the low price prevents the use of reprocessed waste materials such as ash aggregates and limestone, which could provide 50 per cent. of aggregate demand. It also inhibits the production of alternatives such as crushed rock and sea gravel. He goes on to point out that the central planning forum for the south-east region is the south-east regional aggregate working party, to which I referred, where delegates from the Department of the Environment, local authorities and gravel companies decide where and how much gravel will be quarried. The costs of that organisation are met from local authority funds. The organisation is, therefore, a private group, and while it meets not exactly in a clandestine situation, its minutes are secret and I understand that ash aggregate manufacturers are not represented on it. I shall be happy to hear the Minister contradict that, but it is my information.
If that is so, it seems odd for a Conservative Government to be operating what is, in effect, a type of price cartel to support a particular industry and to prevent environmental conservation from playing its full part in the decisions that are made. Those may appear to the Minister to be serious charges, but the situation, as Mr. Smith sees it and as I understand it, is serious in environmental terms.
If it were just a matter of gravel and sand extraction, it would be bad enough, but since in this industry one thing leads to another, yesterday's noisy gravel extraction is today's stinking, pestiferous waste pit. I could make a whole speech about the problem of waste pits in my constituency. I have an extremely large one at Calvert, and the local people, notably at Edgcott and Calvert, have lived with that huge pit for years. It takes much of London's rubbish. They have developed a reasonable relationship with Shanks and McEwan Limited, which operates the pit, and historically, basically because of the clay in the area, the pit has been there for a long time.
But whether it is gravel or waste pits, I do not believe in the equality of misery. The fact that many people's lives are already blighted or their environments have been ruined by the existence of gravel pits in south Bucks is no reason to extend gravel pits to north Bucks. Rather, it is a reason to ask what can be done to prevent the suffering that has occurred and damage to the environment being spread northwards or to parts of the country outside my constituency.
The same is true of waste pits. There have been in my constituency, alongside the applications for gravel extraction, a disturbing number of applications recently for waste pits, notably at Bierton, on the outskirts of Aylesbury, which already suffers from a serious traffic problem, which I hope will soon be resolved by a bypass. To impose a waste tip on that area and on its attractive landscape would be an example of vandalism. The proposal has been refused, but is still under appeal. Other attractive villages such as Aston Abbots nearby could be affected.
In yet another part of my constituency, at Great Brickhill, a totally unsuitable application was made to extract sand and fill up the hole with waste. I was glad that when I took up the matter on the Floor of the House and then personally with the Under-Secretary of State for the Environment, my hon. Friend the Member for Suffolk, South, he told me in his letter of 4 February that he would examine the possibility of guidance in order to prevent waste pits being established within a certain distance of villages.
We know from the time that such questions occupy on the Floor of the House that the Government are environmentally active. I hope that I have made it clear in my remarks that I appreciate the serious and positive response that I have had so far from the Government. The problem is, quite simply, that, although the Government are moving in the right direction in the longer term, the threat to my constituents and those who live in Mursley, Thornton and Beachampton is immediate. Therefore, I beg my hon. Friend the Minister to take an urgent new look at the situation that threatens to tear up the landscape in my constituency and perhaps in other parts of the country and to blight the lives, not only of my constituents, but of many people throughout the land.

Sir David Mitchell: With the leave of the House, I should like to support what my hon. Friend the Member for Buckingham (Mr. Walden) said about the problems of gravel extraction and to refer to an example that illustrates the case that he is presenting. Conclusions can be drawn from his speech and from the example that I shall give.
In my constituency is the attractive village of Mottisfont. It is close to the River Test and is in an environmentally sensitive area. Therefore, of all the areas where one would expect planning consent for gravel and hoggin extraction, that is one of the least likely. However, a planning application was made, was refused by the local authority, went to appeal and has now been granted. When I objected to that planning application on behalf of many of my constituents, I tried to discover why planning permission was granted in an environmentally sensitive area of substantial beauty, beside one of the foremost environmentally attractive rivers in southern England. The


environmentally sensitive area policy is designed to ensure that the landscape is not damaged by changing farming methods. If the landscape is dug up to create a huge pit, that is the equivalent of changing farming methods, so I presumed that planning permission would be refused in the circumstances that I described. However, when I followed through the council's reasons for granting planning consent, I found that the key reason was the policy of counties being largely self sufficient in the provision of gravel, hoggin, sand and other building materials of that nature. The Government should review that policy urgently.
My hon. Friend the Member for Buckingham gave examples from Buckinghamshire where that policy has had an unsatisfactory effect on his constituents. The case that I described in Mottisfont is highly unsatisfactory to my constituents. It is common sense that, when the Mendip hills have thousands of tons of gravel, hoggin and a perfectly good rail system, there is no logic in continuing the policy of counties being self sufficient in those materials.
Will the Minister look carefully at the principle of requiring a degree of self sufficiency within a council? Would it not make more sense for gravel, hoggin and other construction materials to be brought in from other areas where extraction does not damage the environment and where the rail services are such that it can be done perfectly economically and to the great benefit of the environment in the county that will not be dug up?

The Parliamentary Under-Secretary of State for the Environment (Mr. Tony Baldry): With the leave of the House, may I say that through no fault of his own, my hon. Friend the Member for Buckingham (Mr. Walden) missed the Adjournment debate in his name on Tuesday, for which I suspect the Chief Whip has much to answer. I was determined that my hon. Friend should have the opportunity to express his concern to the House and that he should have a constructive reply.
My hon. Friend explained his concerns about minerals and waste disposal sites with characteristic eloquence and reasonableness. He knows that I share many of his concerns, as does my hon. Friend the Member for Daventry (Mr. Boswell). We have had a number of discussions about concerns on the impact of sand and gravel extraction and landfill sites in Buckinghamshire and adjoining counties. I am pleased to be able to respond to this debate to make it clear that the Government share his concerns about the impact of minerals extraction on the countryside. I am grateful for the opportunity to explain the Government's current thinking.
My hon. Friend the Member for Buckingham is fortunate, as am I, to represent a constituency that contains much attractive countryside. Within his constituency, the county of Buckinghamshire, and in mine, the county of Oxfordshire, and in other counties such as Northamptonshire and Hampshire, there are important mineral resources, particularly of sand and gravel. Because of that, it is not surprising that conflicts arise over the desire to protect the environment.
Those concerns are exemplified by the great many objections which I know have been made to the

replacement Buckinghamshire minerals local plan. As my hon. Friend said, that plan is currently being debated at a public local inquiry which has just started. I know that he will appreciate that, against that background, I am unable to comment on the sites that he has mentioned. However, I am confident that the inspector will weigh up all the evidence put to him in a careful and thorough manner before making his recommendations to Buckinghamshire county council, which is the mineral planning authority for the area.
The Government recognise that the environmental impact of the extraction of minerals for construction purposes is a matter of considerable and understandable public concern.
The announcements that we made last week in interim development orders signalled our determination to drive up the standards of the minerals industry. Those old planning permissions cause much public concern, and the amendments that we intend to table for the Planning and Compensation Bill will, first, require IDOs to be registered within six months of commencement of the Bill's provisions, which I expect to be two or three months after Royal Assent. Secondly, in the case of sites dormant for two years before 2 May 1991, they will prevent working from the beginning until the permission has been registered and a scheme of operating and restoration conditions has been submitted and agreed. Thirdly, in respect of working sites—those where working has taken place within the last two years—they will require a scheme of conditions to be submitted for the approval of the mineral planning authority within 12 months of the date of registration. There will be no compensation for the cost of complying with any of those conditions, which will impose far higher environmental standards on the minerals industry than at any previous time in our history.
Those tough new proposals are part of the Government's general approach to environmental questions, following the environment White Paper "This Common Inheritance". The consultation exercise on IDOs shows that there is widespread public concern that the minerals industry does not always operate with sufficient regard for the environment. We take those views very seriously. Nevertheless, I believe that the vast majority of firms operating in the minerals industry have a realistic approach. I believe that they recognise the need for far more stringent environmental standards to be adopted in future, and that the Government's proposals fit naturally into their general context.
My hon. Friend referred to the guidelines, MPG6, which were issued two years ago on the provision for aggregates. We are reviewing this current guidance to ensure that it is up to date and takes full account of the increased environmental concerns.
The first step is the preparation of a long-term forecast of aggregates demand. Demand for aggregates is generated by a proper and natural desire for improvements in the standard of living. That means improvements to our transport infrastructure, especially roads and railways, and improvements in hospitals, housing and water quality. That will be a particularly important factor as we play our part in negotiating and then maintaining rising European Community standards. However, the Government recognise that the environmental consequences of meeting this demand for aggregates must be very carefully


examined and weighed. A forecast of projected long-term levels of demand provides a useful starting point in those considerations.
The forecasts, which were commissioned from independent consultants, were published on Tuesday. They show that, with steady growth in the economy, the demand in England and Wales could grow to between 421 million and 490 million tonnes a year in the next 20 years. That represents an increase in demand of 4 per cent. each year, below the level of growth experienced in the past 40 years. I must stress that the forecasts do not represent Government plans, and are not targets for production which the minerals industry must meet. It is important, therefore, that they should be considered as defining a problem rather than providing a solution.
We regard the environmental implications of the forecasts very seriously, and intend to conduct a full and open debate on the planning and environmental issues they raise. The questions to be considered will include whether the present policy of ensuring a steady supply for the construction industry remains appropriate, as much as the length of time over which guidelines are needed for sensible planning. Before any new guidelines are issued, the Government will want to hear from the industry what practical steps it intends to take to improve its environmental performance and its standing with the public.
We have asked the regional aggregates working parties to consider the medium and long-term implications of the forecasts on their regions. We are seeking their advice on how demand in each region might be met and the extent to which their region can contribute to the requirements of other regions. They will, of course, have full regard to the environmental consequences of increases in the extraction of land-won minerals.
My hon. Friend has mentioned the need to increase the use of materials which are alternatives to primary aggregates. I share that opinion, and the Government made it clear in the environment White Paper that they want to see an increase in the use of waste and recycled materials, including secondary aggregates such as china clay, sand, colliery minestone and slate waste.
We also want increased exploitation of waste and recycled materials, such as power station ash, steel and blast furnace slag and crushed concrete. At present, the use of those materials is less than 10 per cent. of the current production of aggregates. That must increase, and I hope that the industry will show that it can be achieved.
We commissioned research last year to establish the extent of those materials and to identify the steps needed to achieve an increase in their use. We expect the report to be published later this summer. It has already clearly identified that there are considerable stocks of alternative materials which are suitable for use in construction. It has also recommended a number of steps which could be taken to increase their use. I can assure my hon. Friend that we shall carefully examine the report during our review of the aggregates guidelines to see what the Government might do to promote the increased use of such materials.
My hon. Friend mentioned the valuable report which Peter Smith has produced. I know that my officials have held useful and interesting discussions with Mr. Smith and I congratulate him on his work.
I should also like to advise my hon. Friend of some other research initiatives which we have commissioned to examine other possible sources of supply. One project,

which has just started, is examining the possibilities offered by large-scale coastal quarries, such as that at Glensanda in Scotland. It will examine the potential areas of supply, which include Scotland, and indeed Ireland, Norway and the Iberian peninsula. The consultants will also investigate the environmental and economic consequences of providing aggregates to the south-east from such sources.
My hon. Friend will be aware that marine-dredged sand and gravel are a particularly important source of supply to the south-east of England. We have already undertaken two research projects to identify the extent of the resources that could be available, and we have a continuing programme that will provide a comprehensive view on resources. There are, of course, environmental considerations which affect the extraction of marine material, and I can assure my hon. Friend and the House that those will not be overlooked as we investigate the opportunities offered by that source.

Mr. Walden: I have been extremely heartened by what my hon. Friend has said so far, which seems to put new emphasis on the positive points that the Department of the Environment has already come up with. Will my hon. Friend add one further point? Will he draw to the attention of county councils the fact that, given that the Department of the Environment intends to take what sounds like a radical look at the current position, they should not rush into granting planning permission for quarries which could go ahead and perhaps slip from the net of a new and perhaps more positive review?

Mr. Baldry: As I made clear in the introduction to my comments, I fully appreciate and share my hon. Friend's concerns. No doubt he appreciates that county councils, as mineral planning authorities, have to have regard to the guidance which they are given and, in determining applications, have to balance the conflicts which arise, understandably, over the need on the one hand to extract sand and gravel and the desire on the other to protect the environment.
It is of course important that there should be careful use of aggregates and that there should not be over-specification in construction use. We have started further research, which will examine the specification of aggregates used in construction to see if action needs to be taken to help eliminate any unnecessary or excessive use of this valuable natural resource.
The Government recognise that it is essential to continue to raise the environmental standards in the minerals industry. That is why we commissioned Groundwork last year to undertake a study of the environmental performance of the industry. The report was recently published, and a copy is in the Library. It has made a number of recommendations on the steps which the industry could and should take to achieve higher standards.
These include the implementation of a system of corporate environmental management, including site appraisals, regular monitoring of performance and periodic environmental audits. It is particularly important that all employees in the minerals companies should realise that they have a responsibility for the environment in which they operate. Companies must recognise that they need to act as good neighbours; I am sure the Groundwork report will be invaluable as they work towards this end.
As part of our overall approach to drive up standards, we intend to follow up the Groundwork study with a pilot initiative in two counties close to my hon. Friend's constituency—Hertfordshire and Bedfordshire. With funding from my Department, Groundwork will be able to visit a number of current operational sites and recommend the steps which the company in question should take to improve the site concerned.
We are also conducting other research initiatives which will lead to higher operating standards at minerals sites, and we shall shortly be issuing draft guidance on noise, a matter which my hon. Friend is rightly concerned about.
As my hon. Friend and the House will recognise, the current public local inquiry in Buckinghamshire has prevented me from saying more about Buckinghamshire itself. My hon. Friend made his own points in his own way, as did my hon. Friend the Member for Hampshire, North-West (Sir D. Mitchell), and they can be assured that they will be listened to carefully. However, I hope that I

have been able to demonstrate beyond any doubt that we understand the widespread public concern about minerals extraction. We are determined that the minerals industry will in future operate in an environmentally responsible manner. The adoption of high standards is in the interest of operators themselves. We shall certainly take very careful note of the points which my hon. Friend has made as we review the aggregates guidelines.
The review will be conducted in an open and public manner. We shall welcome views on the forecast and the implications for the environment, and these will be taken into account as draft guidance is prepared. There will be a full public consultation exercise on the draft guidelines in due course.
I hope that my hon. Friends will recognise that we take these issues extremely seriously. I welcome the opportunity of being able to comment to the House on the progress that we are making.

Question put and agreed to.

Adjourned accordingly at three minutes past Nine o'clock.